What Is Dividend Tax Voucher? & Dividend Taxation
by Vidit Agarwal Marketing DirectorThe Dividend Voucher-
What Are They?
A dividend is a payment made by corporation to its
shareholders. A limited company should have sufficient profits to distribute
them as dividend. A dividend voucher is also known as dividend counterfoil, it
is a written document that tells how much is paid, to whom it is paid and what
shares the dividend receiver owns . A limited company must issue dividend
vouchers to each shareholder receiving dividend. A company must have record of
dividend voucher, in case HMRC ask for it. Dividend voucher can be produced by a
company itself or it can ask an accountant to do the same. You can ask DNS
Accountants to prepare dividend voucher for you. DNS also provide guidance for
dividend related queries. A shareholder must keep dividend voucher as evidence
and to complete their self-assessment tax return. Tax rules for dividend have
been changed on 6th April 2016.
Details That Dividend
Voucher Should Include:
- Limited Company’s name, registered address and number
- Shareholder’s name and address
- The date of issue
- Type of share dividend receiver owns( such as ordinary share)
- The amount of dividend paid to a shareholder
- How many shares are held by a shareholder
- Signature of a director or other company officers
Click Here, to
see template of a dividend voucher
Working Out Tax On
Dividend- 2016/17 Tax Year
Earlier dividend tax credit system existed but from April
2016, new taxation system was introduced for dividends in which initial £5,000
of dividend income was not taxable, a dividend tax-free allowance. You must
know this doesn’t reduce tax liability on your entire income as dividend income
is taxed after all other income sources are taxed. An individual can inform
HMRC about their dividend income while filling self-assessment form. Tax you
pay on income from dividend above threshold varies by tax band as mentioned
below:
Add your dividend income with your other taxable income:
· Basic-Rate Tax Payer (£0-£32,000), needs to pay
7.5% income tax on dividend.
·
Higher-Rate Tax Payer (£32001-£150,000), needs
to pay 32.5% income tax on dividend
·
Additional-Rate Tax Payer(above £150,000), needs
to pay 7.5% income tax on dividend
Please note you don’t pay tax on dividends from shares in an
ISA. Dividend income that’s fall under your personal allowance do not count as
dividend allowance.
Paying Yourself From A Limited Company
A company is a separate legal entity or artificial person in
the eyes of the law. An individual can take money from the company as a
director’s salary or through other benefits and expenses. Depending on how much
salary you take you may become liable to pay income tax and National Insurance
(NI) to HMRC.
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Created on Feb 22nd 2019 07:43. Viewed 429 times.
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