A dividend is income derived from net profit of a company in which you have shares. Dividends are typically paid out Quarterly, Half yearly or yearly and you should receive a dividend certificate along with this payment.
Dividends are paid to you as a net figure with a 10% tax already deducted – referred to as a tax credit.
Net dividends should be entered into the Self Assessment Guide.
If you are a higher income earner (exceeding the higher PAYE tax threshold for the year) a further 32.5% tax is due on your divided Income.
The gross dividend will be considered for tax purpose and then the tax credit (10% already paid) will be offset against any tax due.
Net dividends should be entered into the Self Assessment Guide.
There are two types of expenses that you shall incur when working as self employed; Reimbursable expenses and Claimable expenses. Reimbursable expenses are claimed back from your client and do not form part of your income and claimable expenses are those you can off-set against your earned income.
It important to note that claimable expenses can only be off-set against your self employed income, and if these expenses exceed your self employed income you may NOT off-set these against other types of income.
Changing your password is easy. Once logged in simply click on Settings (cog icon, top right), go to My Details and select Edit.
Here is where you will find your password (note it’s never displayed).
To change your password simply enter a new password in the password field, click Save and then you’re done.
This tax is owed on any income earned in the UK while a UK tax resident. If you are in full time employment, then your employer will deduct this tax at source and you will receive a payslip as a summary of these deductions.
If you are self employed you will need to declare this income to the government at tax year end and they will issue you with a NI tax bill you will need to pay.
The Self Assessment guide incorporates most of the different types of income streams in the UK, however not all. The Types of income we do not incorporate include: Trust Income, Foreign Income, Debentures and any other type not listed on the types we do cover.
It is important to note that even though those types are not incorporated into this guide, our partner ICAEW registered accounting firm will be able to include these on your year end return should you wish to use them.
Additional income has been included to cover other streams of typical income that has not been included in the categories already mentioned. This would include simple investment income and rental income.
These forms of incomes typically do not have any taxes deducted at source, therefore should be entered into the Self Assessment Guide as the received (gross) figure.
PAYE is an acronym Pay As You Earn. This tax is owed on most streams of income earned while a UK tax Resident. If you are in full time employment, then your employer will deduct this tax at source and you will receive a payslip as a summary of these deductions.
If you are self employed and/or have other streams of income, you will need to declare this income to the government at tax year end and they will issue you with a PAYE tax bill you will need to pay.
Once your turnover within a 12 month trading period has exceeded the VAT threshold you shall be required to either start changing VAT or prove that you are VAT exempt. Once registered you will have to charge your clients VAT and you will need to perform VAT returns. These thresholds are set by the HMRC each tax year.
Being VAT registered allow you to off-set any VAT paid on expenses against the VAT charged, essentially reclaiming the paid on expenses VAT back.
Once VAT registered you may then apply to be Flat Rate VAT registered.
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