With the new Dividend tax rules that come into force from 6th April 2016, the HMRC has decided that it doesn’t want to wait until April 2017 to start collecting these new revenues, when those affected declare the earnings and Income tax through their self-assessment tax returns for tax year 2016-17 (and more likely closer to the deadline of January 2018.
So instead the plan to alter Director-Shareholders tax codes for the new tax year by estimating amounts of Income Tax that will be due for each Director-shareholder.
The deduction in the PAYE code will be labelled “Dividend Tax”, with the notes on the coding notice saying ‘this is to collect the basic rate/higher rate of tax due on your dividend income’.
However, it is possible to get the PAYE code changed, by ringing HMRC.
