Tax issue - please advise

[ksriramanarasimhan]

Dear members,
I am planning to apply for ILR in mid July. I had some issues in tax returns this April which are currently settled as I have cleared all the dues. This is the history

I Started a limited company in August 2012. Little did I realise that the taxes should be paid on dividends. I do not blame my accountant as they had told that they would not look into personal taxes unless paid extra. I had assumed that the taxes on dividends are already paid as part of corporation tax and the dividends do not form the part of personal income.

This is my history of taxes since late 2012.


For FY 2012-13 - The total income including the dividends and salary from previous employment did not exceed £34,370 + personal allowance of £8,109 so no tax is due on dividends.

FY 2013 - 14 - The limit exceeded but I did not show the dividends as part of personal income when I filed the tax returns in Jan 2015. I had even used the dividends to apply for Tier 1 General extension in June 2014.

August 2014 - Switched to a new accountancy

January 2016 - The new accountant told me that the tax is due on dividends taken during the FY 2014-15. I paid this immediately.

Only then I realised that the tax for the dividend is way past its due for FY 2013-14. I wanted to clear the dues and I called up HMRC and explained the situation. I was told to write a letter to them along with the statement of dividends.

March 2016 - HMRC sent the tax for the dividends, along with the interest for the missed payments. I have paid that in April.

May 2016 - Limited company closed as I have been in a permanent job for over a year.

The SA302 form online for FY 2013-14 does not show the payment I made in April for the dividend tax. This payment appears as part of another document in the link 'Statements'.

I would like to know if there is any chance of my application getting rejected. I have currently got no tax due and cleared all the backlog.

[honey2008]

The logic is simple.

If you are running limited company and I assume you are the sole shareholder & director and only taking dividends the following applied

If you take dividend from the company

1) First enough profit should be shown so that after paying taxes you can withdraw money from net profit of the company as dividend by transferring money to personal account.
2) Corporation tax is company affairs with HMRC.
3) Unless you show the dividend drawn from company to your personal account via self assessment that cannot be part of your income.

So if you have shown the dividend income in your personal Self Assessment and there is no MISMATCH or so called ACCCOUNTING ERRORS then your case will go through smoothly

Later amendments of TAX DISCREPACIES/MISMATCH/ACCOUNTING ERRORS and claiming PAID in FULL will solely depend on interpretation of UKVI.


Regards
Honey

[honey2008]

Just to add.

If after adding Dividends to you other income your income goes above the tax slabs you have to pay extra income tax which is evident from your SA.

Ta
Honey

[ksriramanarasimhan]

Thanks. The dividend went above the tax slab. This was not declared initially but it was corrected later. HMRC says that the amendments will not be a part of SA302 but will be reflected in the statements.

[Ron101]

Hope for best. My amendment done all paid but they still refused it based on dishonest and deception. I paid my 2010-11 tax with interest last month but still go refused.

Good luck and let us know what outcome you get. Thanks. Ron

[ksriramanarasimhan]

Hi Ron, Did you go through any admin or judicial review after that?

[Ron101]

Hi,

Admin review is no good option. Most cases declined straightaway. Just trying luck with fresh application but same time going for Judicial review. Long shot but just trying.

[rocktheparty]

Hi,

Admin review is no good option. Most cases declined straightaway. Just trying luck with fresh application but same time going for Judicial review. Long shot but just trying.

Hi Ron

Can you do both (reapply and JR) together?