Dividend Certificate

Hi Justin, you're quick off the mark!

Considering how few of these shareholders there are in the CB database, getting CB to recognise a non-res, human, shareholder and automatically adding the tax credit is, probably, a step too far at the moment.

More realistic as a suggestion might be a generic message such as "for non-resident individuals this dividend carries a tax credit of £(1/9th of div)"

What do you think?

Hi Paul

not that quick ... april 2016 the rules changed I think?

it affects me personally as without the tax credit on the dividend, in France you get fully taxed (i.e. cannot benefit from the tax credit) and the dividend is subject to 'prelevements sociaux' which add 19% to the tax bill. so an extra 30% (of the principal) tax burden.

I'm not sure that the amount is 10% of the gross or 1/9 of the nett. The wording of the act is:

"The person is treated as having paid income tax at the dividend ordinary rate on the amount or value of the distribution."

For 4/2016 onwards, I fear the dividend ordinary rate is 7.5% although I'm very unclear on the whole government approach to dividends for non-uk residents and tax.

Hi Justin - yes but the Finance Act wasn't passed till months later and, if you Google it you'll see there was quite a bit of discussion over the practical implications.

The "dividend ordinary rate" was established under what was known as Schedule F being what we had pre 5.4.16 so 10% on the gross, 1/9th on the sum paid. Corporate shareholders are treated as having received a gross amount.

To be honest Justin I was never able to find the tax legislation that required companies to state any tax credit, the point always was that if you could show you received a dividend from a UK company that was good enough.

that's interesting Paul. thanks. I think you are right about the requirements of a dividend certificate. However here in france the tax authorities are local civil servants and if you are in the countryside, they may not be familiar with the rules. For me, certainly they require 'supports' each year - meaning the official documents that set out the tax credits, salaries etc.

Section 5(3)(c) of the 2016 Finance Act sets the dividend ordinary rate at 7.5%. I have not checked but I think that this is now in force. do you agree?

ta Justin

going back to the original question: clearbooks knows the shareholder details

when you provide the new shareholder data the system makes you state whether it is human or corporate and provide the country.

so it should be possible to craft different text. or even the same text with sufficient options in them to be helpful; as you suggested.

Hi Paul - as it happens I am a tech lawyer but spend about 35% of my time programming in a variety of languages (for the last 40 years).

the dividend certificate is generated on the fly so coding is very straightforward. as there are no accounting changes to be made it is a simple case of analysing the address data and deciding what to put on the cert.

i will post a ticket but had assumed that these forums would be reviewed. silly me!

Hi Justin and Paul,

I have responded to your ticket, Justin, so many thanks for sending that in. But just to reiterate, this has been escalated to our technical team, who will investigate further and action any changes required. As soon as they inform me of any progress, I will post another update and confirm via your ticket as well.

If you need anything else whilst this is being looked at, please do let us know.

Have a good weekend.

Kind Regards,

Natasha