NewsTuesday 15th March 2016
Your Tax Code for 2016/17
Your tax code for 2016/17
The amount of tax you pay on your salary depends on the tax code issued by HMRC. With the introduction of the new dividend tax in 2016/17, HMRC are altering tax codes for those who take both a salary and dividend from their company.
HMRC estimate how much dividend income you will receive during the year based on previous years dividends, and then calculate how much tax will be due on it. They then adjust your tax code so that the tax is deducted from your salary during the tax year.
This may cause you to pay too much tax and also means you pay the dividend tax earlier than necessary if you’re a self assessment tax return filer.
You don’t have to accept this dividend alteration to your tax code, and can contact HMRC to request it to be removed.