when do I give gordon my Dividend Tax credit ?

[css_jay99]

Hi boys & girls,

I have a question regarding the tax credit on dividends.

i run a ltd co. and would like to know when i have to pay over the Tax credit to HRMC.

Do i withdraw dividends gross from company accounts, keep it in my personal account and then pay over the the tax credit(+ other tax due) when i come to do my self assessment at the end of the year OR do i just pay it over to HRMC immediately dividends are taken out?

earlier option seems more profitable as the dosh can earn some interest in my ISA !


same question also goes for tax + NI when running PAYE system, do you just take all out Gross and then pay all to gordon in April ?


cheers css_jay99

[Ennui]

You may do well to get yourself an accountant.

[dmini]

I'm stunned!
For goodness sake get an accountant.
You don't sound as if you have done the basics, like being registered with HMRC as an employer - otherwise you would have the answers, if you read what they sent you
Or maybe you just posted this to wind us up?

[Nixon Williams]

Hi boys & girls,

I have a question regarding the tax credit on dividends.

i run a ltd co. and would like to know when i have to pay over the Tax credit to HRMC.

Do i withdraw dividends gross from company accounts, keep it in my personal account and then pay over the the tax credit(+ other tax due) when i come to do my self assessment at the end of the year OR do i just pay it over to HRMC immediately dividends are taken out?

earlier option seems more profitable as the dosh can earn some interest in my ISA !

same question also goes for tax + NI when running PAYE system, do you just take all out Gross and then pay all to gordon in April ?


cheers css_jay99

The tax credit is notional and is not paid to or by anybody!

You should not be paying salaries gross, NIC & PAYE should be deducted and paid over throughout the year.

I think you need an accountant asap.

Alan

[philip@wellwoodhoyle]

The tax credit on dividends is "notional" - it is pretend, not real. It never gets paid nor reclaimed. The dividends are paid out of "after tax" company profits, so the company has already paid corporation tax on the profits out of which the dividend is paid. Personally, you only pay tax if the dividends push you into the personal higher rate band, in which case you pay higher rate tax of the equivalent of 25% on the amount of the dividends that fall into the higehr rate band.

Re wages, PAYE and NIC. These are generally due for payment quarterly, but if your wages are high, they are paid monthly. If wages are very low, at or around the personal allowance level, no or little payroll PAYE nor NIC is payable.

Corporation tax on company profits is due for payment 9 months and 1 day from the end of the company's accounting period.

VAT is payable quarterly within one month of each quarter end.

Remember "self assessment" - you won't get tax bills without you telling the HMRC how much tax is due by completing tax returns as they fall due for all these taxes.

Hope that helps.

[Flat Eric]

i run a ltd co. and would like to know when i have to pay over the Tax credit to HRMC.

Send me a cheque for the tax credit amount and I'll make sure Gordo gets it, or at least I'll send the cheque to him

[css_jay99]

Things are a lot clearer now. I was looking at the tax on divs like the old advanced corporation Tax.

I do use a payrol system whereby i pay gordon his due every month, i was just trying to see if there was a way of paying only ones a year their by making some money, looks like no luck on that. But i guess paying quaterly is something!

looks like I am going to be paying via the nose come january re tax return.

Apart from the low wages you guys pay your selfs, how many times do you did into the Ltd co. accounts to withdraw money and then declare it as divs at the end of the accounting period. At the moment, since new Ltd co. I have only taken divs out ones at the end of AP which meant beign broke for most of the year !

[Flat Eric]

Things are a lot clearer now. I was looking at the tax on divs like the old advanced corporation Tax.

I do use a payrol system whereby i pay gordon his due every month, i was just trying to see if there was a way of paying only ones a year their by making some money, looks like no luck on that. But i guess paying quaterly is something!

looks like I am going to be paying via the nose come january re tax return.

Apart from the low wages you guys pay your selfs, how many times do you did into the Ltd co. accounts to withdraw money and then declare it as divs at the end of the accounting period. At the moment, since new Ltd co. I have only taken divs out ones at the end of AP which meant beign broke for most of the year !

IIRC, you can declare dividends as often as you like. I'd say most will declare them monthly (as I intend to do).

[css_jay99]

IIRC, you can declare dividends as often as you like. I'd say most will declare them monthly (as I intend to do).

yes but won't IR deduct that you are paying yourself a salary and trying to skimp on NI ?

[ratewhore]

I believe you can pay yourself divs monthly then declare it all at year end?

But then, I pay someone else for advice so you don't really want to listen to what I have to say...