my accountant says that dividends ahould be shown as net (90%) of what it actually paid on compaines house a/c
United Kingdom - 3 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
Yes, clever man, he is correct.
Answer 2 :
What's a companies house a/c? Dividends are paid on a net basis with an attaching tax credit of 1/9th.
Answer 3 :
Definitely not! If a company declares a dividend of £90, it will pay the shareholder £90 and will show £90 as dividends paid in its accounts. That part is simple. Where your accountant appears to be confused is that the company will give the shareholder a dividend voucher showing £90 paid and a £10 tax credit making a gross dividend of £100. The company never pays the £10 or shows it in their accounts. The shareholder has to pay income tax on the gross amount of £100 but can deduct the notional £10 tax credit from the income tax liability. To an accountant this is basic, so if it seriously was his advice (not that you misunderstood) you should find a new accountant.
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