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Ask Your Own Question, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 4961
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi Sam I wonder if you can help me with another question. A

Customer Question

Hi Sam
I wonder if you can help me with another question.
A client trades as a limited company and they are the only shareholder. A dividend is paid each year from the company profits. Let's say this is £10k.
In the self assessment for the client, when HMRC ask for the dividend paid, they say "do not include the 10% tax credit".
If I use £10k, the income then shows as £11k.
If I use £9.09k, the income shows as £10k.
Which of these methods is correct?
Many thanks
Submitted: 3 years ago.
Category: UK Tax
Expert: replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

I am another expert on this site and I am happy to help you.

You should report the actual amount received i.e £10k (dividends carry a notional tax of 10%).

The tax calculations would gross it up to £11k and also show a tax credit of £1k on SA302 (tax calculation summary).

If your client is a basic rate tax payer then there is no tax to pay on dividend income.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Expert: replied 3 years ago.


I notice you have viewed my response to question on reporting of dividends paid on a tax return (JACUSTOMER-t3wll26c- Last Viewed on 10/13/2013 at 11:03 AM).

Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

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