No more Time to Pay for dividend payers
Companies that use dividends as a form of remuneration are no longer eligible for Time to Pay (TTP), the respite from the taxman that lets the business pay on a timetable it can afford.
Speaking after a meeting with HM Revenue & Customs, accountancy firm Menzies said the tax officials made clear that dividend payments would preclude a company from TTP.
Business owners who recently paid a dividend as part of their remuneration package are already being turned down, the firm said, by HMRC’s Business Payment Support Service.
Launched in 2008, TTP requires all applicants to provide their tax reference number, details of the tax they hope to defer and details of any repayments they receive from HMRC. Businesses in the IT sector are among its heaviest users.
However officials last week said the scheme is off-limits to company owners who drew dividends while running up a tax debt, on the basis that they preferred to use the money elsewhere.