Question about income tax on dividends

[l35kee]

I siphon off the 7.5% every time i draw a dividend. Is this not common practice?

[chopper]

There is a slight caveat. In my case, HMRC collect my dividend tax through my PAYE code. So I don't need to make a POA payment in Self Assessment, because I am paying it in PAYE. HMRC estimate that my dividends will be the same in 2017/18 as they were in 2016/17 and base it on that. I can tell them if I think otherwise.

The numbers are the same, of course. It just blunts the pain a bit.

[ladymuck]

I siphon off the 7.5% every time i draw a dividend. Is this not common practice?

You'd be surprised, or maybe not. I have a separate bank account into which I stash money that I think I will owe HMRC but there are a lot of people who don't put aside even the VAT they collect (which was never theirs in the first place).

[SueEllen]

I siphon off the 7.5% every time i draw a dividend. Is this not common practice?

Yes you should.

You should have an account for bills like that preferably with a different financial institution. That way if you are overdrawn on your main account, the bank can't help themselves to that money.

Btw It does happen