dividend rounding

[yod9999]

Not sure if I'm worrying about nothing here, but...

I paid myself a net dividend of £1500. I own 10 shares in the company.

£1500 / 0.9 = £1666.67 (rounded)
£1666.67 / 10 = £166.67 gross dividend per share

calculating this back gives 166.67 * 10 * 0.9 = £1500.03

Should I worry about this missing 3p. Will the taxman worry about it? I just want to make sure everything is in order.

Cheers

[TheRefactornator]

You could lie awake at night worrying about that...or perhaps add a thousand more digits after the decimal point to eliminate the rounding.

In the unlikely event you were ever pulled for this miniscule error the worst that will happen is you'll have to pay the 0.03p arrears + interest + penalties. Not something to worry about really...unless you were to consider <0.10p a lot of cash.

[MrRobin]

In your next dividend, just round the amount down to compensate.

[yod9999]

thanks for the replies. it hasn't quite been keeping me up at night, but i was wondering if it would be noticed at all. maybe i'll just put 10p aside somewhere just in case of fine+interest....

[maverick]

Surely YOU are owed 3p so nothing to worry about.

[Hex]

There is no missing 3p. You are compounding rounding errors by back calculating after rounding.

In your example:

Gross Dividend = 1666.67
Tax Credit = 166.67
Net Dividend = 1666.67 - 166.67 = 1500

The only rounding above is the rounding from 1666.67 / 10 = 166.667 which rounds to 166.67.

[yod9999]

There is no missing 3p. You are compounding rounding errors by back calculating after rounding.

In your example:

Gross Dividend = 1666.67
Tax Credit = 166.67
Net Dividend = 1666.67 - 166.67 = 1500

The only rounding above is the rounding from 1666.67 / 10 = 166.667 which rounds to 166.67.

good point. i really shouldn't try and do these things late at night after a couple of beers...

cheers