With the new dividend tax coming into force now can someone please confirm if the new tax payable is staggered at the end of FY16/17, ie not the full amount needs to be paid straight away. I have tried reading up on this but is not clear. Any pointers welcome.
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Dividend Tax Payment Question
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The tax due on the dividends will be declared on your self assessment and then paid by the end of the following January in full.
HMRC have amended tax codes in some cases for the expected tax due on the dividends in which case it may be taxed at source or at least part of it.Comment
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Don't forget if you're not already making payments on account that the new dividend tax will likely result in payments on account going forwards, so when you submit your tax return after April next year, you'll owe the dividend tax for 16/17 (just over £2k if you go right up to the higher rate threshold) plus half again for 17/18 by end of Jan 18 and the other half in July 18, so best to put aside 7.5% of all dividends in excess of your personal allowance + the £5k dividend allowance *as you pay yourself* so you're not caught short.Comment
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Originally posted by TulipSmartGropeAre you referring to the fact that 50% needs to be paid up front?Comment
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Originally posted by TheCyclingProgrammer View PostDon't forget if you're not already making payments on account that the new dividend tax will likely result in payments on account going forwards, so when you submit your tax return after April next year, you'll owe the dividend tax for 16/17 (just over £2k if you go right up to the higher rate threshold) plus half again for 17/18 by end of Jan 18 and the other half in July 18, so best to put aside 7.5% of all dividends in excess of your personal allowance + the £5k dividend allowance *as you pay yourself* so you're not caught short.
Originally posted by TheCyclingProgrammer View PostNobody pays tax up front.______________________
Don't get mad...get even...Comment
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Last time I checked, the tax year for 17/18 runs April 17 to April 18. Paying half the tax for that period in January 18, when that period is 3/4 complete, and the other half of it in July 18 when that period is finished, is not paying tax "up front". It is paying it earlier than the date you have to file SA, but it is paying it after you have received the related income, and so is assuredly not "up front."Comment
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Originally posted by kaiser78 View PostYes - this what I was referring to.
Please see above.
Payments on account are not made in advance though. Not normally anyway.
There is a slightly inconvenient scenario when you take lumpy income, such as irregular dividends or push most of your earnings to the end of the tax year.
In that scenario it is possible to know you'll earn £X in a tax year and make payments on account to that effect but if you pay more than half of that income between Feb and the end of the tax year then yes technically you'll be paying some tax in January before you've earned it.
This should only be an issue if you haven't planned ahead though.Last edited by TheCyclingProgrammer; 12 May 2016, 10:20.Comment
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Originally posted by TheCyclingProgrammer View PostYes, I saw my own post.______________________
Don't get mad...get even...Comment
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Originally posted by kaiser78 View PostYou got me on that one !"You’re just a bad memory who doesn’t know when to go away" JRComment
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