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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I formed a limited company in Feb 2014 as a Director and started

Customer Question

I formed a limited company in Feb 2014 as a Director and started trading on Oct 1 2014. In 2014 I has PAYE £15000 and drew a dividend from oct 2014 through to Dec 2014. Do I need to complete a self assessment form for the end of the year 2014?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

As a director, you should be registered for self-assessment but as you appear to have been a basic rate taxpayer for 2013/14 and in 2014/15 to date, then no tax has been lost to the Treasury and I doubt you will face a fine. I have registered one or two year directors who have became clients of mine and the tax office have sometimes issued several tax returns at once to catch up but none have ever been fined.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

What about tax on the dividends i have taken. Does that count as personal income which should be taxed or is that company tax?

Expert:  TonyTax replied 2 years ago.

The dividends are treated as basic rate tax paid in the hands of the taxpayer. In effect, you are being given tax relief for a part of the corporation tax paid on the profits as a dividend is just a distribution of post corporation tax profits. It is taxed as personal income. Take a look here for more information.

If your total income in 2014/15 is no more than £41,865 gross then you will have no further tax to pay on dividends. If your salary is more than the personal allowance of £10,000, then you should be paying some tax through PAYE on the excess. If I were you, I'd register for self-assessment as you are a company director.

Expert:  TonyTax replied 2 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?