How to record Dividends from LTD to HMRC

smoothieee

Hi Guys,
Please I need some pointers.
I work Part time (PAYE) and, I also have a LTD company on the side.
This is the first year that I will be drawing dividends payment from my LTD. I have only just done the dividends voucher for £9000. 
However, I am a bit confused about how to report this payment to HMRC. How is it done?
I have already done my company Tax Return and annual return but, how do I now record this dividends to show that is money earned from my LTD. 
thanks!

TripleH

Do you file Self Assessment tax returns With HMRC?
Are you registered to file them?
Do you have an accountant, this is something I'd expect them to cover with you.

TheCyclingProgrammer

Unless the dividends are covered by existing allowances (and as such no tax is due on them) then they need to be reported to HMRC. I believe dividends up to a certain amount can be reported without registering for self assessment.

Generally speaking, most people will report them on their tax return. If you already do one then report them on your next return. If not, you can register online. 

smoothieee

TheCyclingProgrammer said:

Unless the dividends are covered by existing allowances (and as such no tax is due on them) then they need to be reported to HMRC. I believe dividends up to a certain amount can be reported without registering for self assessment.

Generally speaking, most people will report them on their tax return. If you already do one then report them on your next return. If not, you can register online. 

@T@TheCyclingProgrammer No, I haven't done a self assessment tax return and just to clarify the dividends in question is 8500. Hence, I'm guessing its unlikely to be within my existing allowance because, from PAYE , I earn up to 18K. that said, I guess this means that, I fit in to the self assessment threshold if I want to draw this dividend? 

Speedbird676

The dividend is more than the £2,000 dividend allowance so tax will be payable.

If you have less than £10,000 in dividends for the year you can tell HMRC and they will adjust your tax code to collect the tax but personally I find it cleaner to just register for Self Assessment and submit a tax return:

https://www.gov.uk/tax-on-dividends

smoothieee

thank you very much for your contribution, i have just started with the Self assessment. its all clear to me now.

TheCyclingProgrammer

If this is going to be a regular thing I agree it would probably be easier to register for self-assessment but if its a one-off don't rule out a tax code adjustment - it effectively gives you longer to pay it off over a longer period of time and you don't need to worry about the payments on accounts system or submitting a tax return each year.

Grumpy_chap

smoothieee said:

 just to clarify the dividends in question is 8500. 

You say £9,000 in your OP.
Accuracy is important for the tax return.

jimmo

smoothieee said:

@T@TheCyclingProgrammer No, I haven't done a self assessment tax return 

I'm confused. Last week you were completing your 2nd Self Assessment including self employment income.

https://forums.moneysavingexpert.com/discussion/6151700/confused-with-my-self-assememnt#latest

This week you are on your first with no self employment but dividends.

p00hsticks

TheCyclingProgrammer said:

If this is going to be a regular thing I agree it would probably be easier to register for self-assessment but if its a one-off don't rule out a tax code adjustment - it effectively gives you longer to pay it off over a longer period of time and you don't need to worry about the payments on accounts system or submitting a tax return each year.

If the OP is director of the limited company then isn't it compulsory that they complete a self assessment (It certainly used to be) ?

TheCyclingProgrammer

p00hsticks said:

TheCyclingProgrammer said:

If this is going to be a regular thing I agree it would probably be easier to register for self-assessment but if its a one-off don't rule out a tax code adjustment - it effectively gives you longer to pay it off over a longer period of time and you don't need to worry about the payments on accounts system or submitting a tax return each year.

If the OP is director of the limited company then isn't it compulsory that they complete a self assessment (It certainly used to be) ?

No it isn't and it was never compulsory.

Until a year or two ago HMRC used to incorrectly state that if you were a director that you had to complete a tax return but this had no basis in law whatsoever.
A few years ago this went to tribunal where it was pointed out and HMRC have since revised their guidance on this.

There is only one legal reason to submit a tax return under the Taxes Management Act (section 8) and that is if you have received a notice to file one. You will typically receive a notice to file a tax return if a) you've registered for self-assessment or b) HMRC decide to send you a notice to file, typically in response to them being notified that you may have untaxed income.

There is a separate requirement to notify HMRC (TMA section 7) if you have any income (or chargeable gains) that is taxable and has not had tax deducted at source - this requirement is waived if any income has no net tax liability (e.g. it's entirely within your personal allowance or other tax allowances including zero-rate bands like the dividend "allowance"). There is also a separate requirement to notify HMRC if you are liable to pay national insurance.

In short, if you are not registered for self assessment, have no untaxed income (or any income that is taxable would result in no net liability to income tax or national insurance) and do not receive a notice to file a return you have no legal obligation to file one or notify HMRC.