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Dividends :
Dividends are a portion of post tax profits paid to the shareholders, the owners of a Limited Company. Dividends are always declared and paid net of national tax at a rate of 10%.
This 10% tax credit is not actually paid by the shareholder or the company – it is treated by HMRC as a deemed payment of tax. Before declaring a dividend the company should ensure that there are profits available to support the dividend payment. Once this has been satisfied the company holds a board meeting to declare the dividend.
There are no limits to how many dividends that a company can declare; however in reality once a month is usually sufficient.
Taxation of Dividends
- Provided that the recipient of the dividend is not a higher rate tax payer then no further tax will be due on the dividend. The dividend received would be treated as tax paid.
- Higher rate tax payers will be liable for an additional charge on any dividends that exceed the higher rate threshold.
Contact the office for details
Tawanda EU Ltd Accountants
24, Milner Road, Gillingham,
Kent ME7 1RB,
UK
Phone + 44 787 296 2016
Email info  tawanda.co.uk
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