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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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UK tax dividends rules -April 6th and post-April 6th 2016

Resolved Question:

UK tax dividends rules for pre-April 6th and post-April 6th 2016 and do I need to let my employer know.I work full time earning £32000 a year for someone else and I also own a very small limited company which I don't take a salary from as it doesn't make enough profit.I took a £400 dividendfrom it last year which I am now declaring on my CT600 form for last year. My question is do I have to declare this on a self assessment form? Also, my current employer who doesn't know I have a company is changing the company to a partnership which means I have to fill in a self assessment form for them so I need to know if a small dividend will affect my tax code based on my 32k separate salary and if I will need to declare it on the self assessment form. I don't want them knowing about my company if I can avoid it.Thanks,
Mark
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Dividends do need to be disclosed in your personal tax returns.

As you are a basic rate taxpayer, for 2015/16 you won't have any tax to pay on your £400 dividend. For 2016/17, the first £5,000 of dividends are taxed at 0%. Look here for information on the new tax rules for dividends. You don't have to have dividend tax collected through your tax code. If you receive more than £5,000 in dividends in 2016/17, you can pay the dividend tax through your self-assessment tax return.

The partnership will need to complete a partnership tax return (SA800). All that will disclose will be the accounts figures and each partner's profit share. You should be given a copy of your partner page so that you can put your profit share into your personal tax return. There is no need for the partnership to know about your own limited company unless it conflicts with partnership agreement rules.

I hope this helps but let me know if you have any further questions.

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