Corporaton Tax/Income Tax

[Dudley]

Can anyone tell me please what percentage of Income Tax a higher rate tax paying company director would have to pay upon receiving a dividend from company funds upon which Corporation Tax has already been paid.

[cruciverbals]

You would have received a tax credit of one ninth of the cash amount of the dividend.representing 10% of the tax credit inclusive amount.

You will pay a further 22.5%(25% of the cash dividend received)

You should avoid getting into the higher rate if possible with a little bit of corporation tax planning . a lot of accountants audit the accounts as they are and do not advise. Tax planning should be done at the start of the financial year as it is often too late when the accounts have to be audited.
Now that the chancellor has removed the 0% starting band from 1st April 2006 it has become it bit more difficult but there are still things you can do.

Contact me if you like on:[email protected]
I am retired now but I still do a few accounts for friends etc.
David

[Dudley]

Thanks David. That confirms what I have since been told that it would be an additional 22.5% but I don't quite understand what you mean by (25% of the cash dividend received) '. My accountant is away on holiday at present and that's why I am asking.