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Tax Code Changes – are you aware?

Shareholders should be aware that since April 2016 they have had to pay tax on their dividends. Previously they only paid tax on dividends if they were a higher rate taxpayer.

What they may not know is that HMRC is amending their tax codes in order to collect the anticipated tax due through the PAYE system in the current year. This adjustment is based upon the assumption that the dividends receivable will be the same as in the previous tax year.

As dividends can only be paid where there are sufficient distributable reserves there is no certainty as to how much will be available. So if there is likely to be a reduction in the dividends or if the taxpayer has made payments on account they may need to contact HMRC to get the tax code changed.

Even if the tax code is correct taxpayers need to be aware that it is likely to have a material impact on cash-flow as the dividend tax will be paid much sooner than if it was paid through the self-assessment system.

Howell & Co has been assisting Online Profiling Ltd since 2005. They couple efficient service with good practical advice and are always extremely helpful and professional.  
Trevor DawesManaging DirectorOnline Profiling Ltd

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