Entering Dividends in Company Tax Return

First time filing my Company Tax Return myself and am now at the stage of filling “Profit and loss” page. I pay myself Salaries and Dividends, and while I can enter the Salary with other Staff Costs in Box AC415, I don’t know where to enter the Dividends and whether enter it in Box AC425 “Other charges” or is it not necessary to enter the Dividends when filling Company Tax Return. Thank you.

Hi

I assume you are using HMRC's online filing software. If so no entry is required for dividends in any part of the software. 

Thank you

Thanks a lot for your reply, and yes you were right, am filling the Company Tax Return using HMRC Online service. The problem is that if I did not include the Dividends in the “Other charges", Box AC425, or any of the other "outgoings" boxes, the “Profit and loss” figure will not be correct, reflecting the actual amount of my company Profit and loss which £0 at the end of the year. Thank you.

Hi Ben, I am happy to be corrected on this, but let me give you an example of my understanding of this. Because it sounds to me as though you may be mixing up the effect of dividends on company profit. Let's say your company has sales of £100,000. You then have £7,500 of expenses. You then spend £12,500 paying yourself a salary. This would leave you with a profit of £80,000. At a Corporation Tax rate of 20% (for simplicity!) your tax would be £16,000. This leaves £64,000 available to be paid as dividends to the shareholder(s). You may have withdrawn all 64k as a dividend. Or you may have withdrawn 40k as a dividend and left 24k in the company. It makes no difference. Profit has already been calculated and some or all of those profits will have been to the shareholder(s) as dividends. The relevance of dividends becomes important on the self assessment as it is then part of your income. Again, happy to be told I'm wrong or have misunderstood, but that is my understanding here. Jon

Thans a lot Jon for your help. Your explanation and the example you gave couldn’t be any clearer for a newbie like me. The example you gave is spot on and matching exactly my simple company finance outline (as a limited company sole Director locum pharmacist), and yes you were right, I totally misunderstood the company profit and thought wrongly it should be £0. I really appreciate your help, wishing you all the best.

Hi,
​​​​​​You can enter dividends on the tax return by following these steps: 
. Ensure you select ‘Full Accounts’.
. Work through the accounts until you come to the box AC7000: Additional Notes. 
. Select this and enter the dividends figure.
. Please be aware that dividends are NOT shown on form CT600.
If you still require assistance after following the above steps, please click the ‘Get Help’ link at the top of the page. HMRC’s support team will try to help you resolve the issue.
Thank you.