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A question:

I’m just completing my Self Assessment for 11/12 and have fallen foul of the 25% tax on dividends – didn’t realise it existed. So part of the year was PAYE and earned around 40k but then earned 30k+ dividends – taking me well into higher rate.

The year end accounts were submitted just after year end 31/1 to Co’s House and corp tax return done and paid to HMRC.

At this point can I say that any of the dividends were paid in the new tax year 12/13 as I’ve earned zilch so far this year due to different circumstances.

(NB this question is from one of our clients, so didn’t go through pour pre year end planning mechanisms)

Our response:

It depends whether it was a interim dividend, which is deemed to be “paid” when approved by directors or actually paid to shareholder or credited to directors account (i.e date of bookkeeping entry) or a final dividend which is deemed “paid” on the date it is approved by directors /signing accounts off.

CTM20095 – ACT: General: Notes on company law aspects of dividends

is the official guidance on it.

The only dividend dispute I’ve ever worked with HMRC focused on this issue, HMRC wanting to move dividends from accounts to 31.3.01 from 00/01 tax year to 01/02 tax year based on date of approval of the accounts; I.e. what you are trying to achieve.

So, it is possible, but depends on paper trail.