Quite often company directors set up a capital structure with family members as shareholders. This is fine as long as the correct processes and procedures are followed at the tax year end.
Anyone in receipt of dividend income is required to submit a Self Assessment Tax Return by the deadline of 31st Ocotber if filling on paper, or at the very latest 31st January if filing online.
If this is not done, you will be liable to penalties and fines, and in the most severe of cases, where the act is seen as deliberate, which can be the case where the tax payer has a finance background or accounting qualifications, maybe even a criminal record.
In order to file you will need the correct supportive documentation to show interim dividends declared and final dividends agreed as per the companies minuted general meetings. Dividend vouchers must be supplied to all shareholders detailing the tax credits available and the date the dividend falls due.
Many accountants do not provide these vital documents which can cause issue for tax payers when declaring monies received.
HMRC are not obliged to notify you to file a tax return, it is the tax payers responsibility to report any untaxed income, of which dividends is certainly one source.
To avoid penalties and fines make sure you prepare and file your tax return before the January 31st deadline. If you would like us to review your situation, please contact us as soon as possible.
