Managed Service Company & Corporation Tax on Dividends

[Jk2007]

my company deducts 21.1% corporation Tax on the dividend paid to me, but gives me only 10% Tax credit on my Dividend Tax Voucher. Is this normal?

[John]

Is this normal?

Yes, totally. As long as you appreciate that the 10% you mention is actually 10% of the total of the dividend and the tax credit combined. That is, the tax credit on UK dividends is actually one-ninth of the amount of the dividend.

Managed Service Company (MSC)? You are no doubt now well aware that legislation comes into force next April that adversely affects the operation of MSCs. If the organisation operating your MSC has not already been in touch with you (which would amaze me) you need to make contact with them and find out what they propose to do.

[Jk2007]

Thanks John for the reply.

[John]

That looks like a sensible plan, finish off the current contract using the MSC, and then move over to your own Limited Company.