Hello, wondering if anyone on here can help as I can't seem to find the answer on Google. Over a year ago I was a director of a tld company. I did this for 13 months roughly. I am now back in a paye job. When I was a director I paid corporation tax but my salary was not enough to pay personal tax. I paid about £1800 corporation tax. I did not receive any dividends. however I have received my tax code for the next financial year and it is 950l. This is because I have a dividend tax of £1491 being deducted as well. Considering I hardly earns any money at all and even got a refund on my personal tax across the financial years I am not sure why I am being deducted this when I did not receive dividends.
ive sat on hold to hmrc too many times and have emailed them but no reply. Any advice here would be great.
From April 2016 tax is payable on all dividends over 5k a year. HMRC, in their infinite wisdom, have decided that they will collect the dividend tax through the tax codes, whether or not there's going to be tax to pay or not. Kind of defeats the object of self assessment doesn't it?
Unfortunately you will need to speak to them and ask them to remove the dividend tax part.
However, going back to your Ltd Co, paying Corporation Tax of £1800 means you declared a profit of £9000, surely the other £7200 would have been a dividend? Not that it would have attracted any tax of course, but you would have to have extracted the profit somehow.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
