I have a question regarding tax on dividends and wondered if anyone can help, I’ve recently set up an ltd company and I’m trying to look ahead and organises any tax liabilities for dividends. Can someone confirm if I have understood the HMRC requirements correctly?
Any profit the ltd company has is subject to corporation tax X% depending on threshold, Records of this are kept for declaration to the HMRC for the company tax return. Profit less corporation tax is the amount of dividends which can be distributed to shareholders. 10% of which is the amount of tax credit.
Now, bear with me…………………………….
I need to retain a pot of money for the corporation tax which is due to HMRC (company tax return). Do shareholders need to retain a pot of money for the tax credits for when completing self-assessments or are they free to spend as long as it’s within £32,010+tax allowance?
