When do i pay tax on dividends

Nervsmomma2022

Can someone explain to me how or when the tax is taken off director dividends? I will be getting 45k salary with the first 12,500 going through as paye then the rest as dividend. Also about another 40k dividened ontop of this after the accounts are done each year. But i dont understand when the tax comes off? Or if i save it each year to come out after self assesment is completed once a year 

lisyloo

When I was director of a Ltd company it was done by self assessment.
as you say paid in arrears.
i used to put the tax away monthly into a seperate bank account.

Bookworm105

please adjust your mindset, you are not drawing 45k salary

- you are drawing a PAYE salary equivalent to the personal allowance so as to use that up (and get state pension credits whilst paying low  employee NI). By taking that "maximum" amount you are getting a regular cashflow for the largest amount you can get per month without unnecessarily incurring tax 

- the rest of your remuneration is via dividends.
I seriously hope you are not taking a dividend every month. If you are, did you accountant approve that? Does your accountant have insurance for when HMRC decide a monthly dividend is false and should be taxed as PAYE salary.
 
- you declare your dividends on SA and pay the tax thereon under the SA timescale. So you will by year 2 be facing payment on account payments and balancing charges. You can look those facts up yourself