Hi,
(1 Man ltd company).
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Tax return?
The 10% is a notional tax, and additional tax will be due if it is liable to higher rate tax. The dividend received is considered to be net dividend, and the grossed up dividend is used for calculations of personal tax.
What have you been putting on your SA tax return? If you don't understand gross/net dividend (and it seems not, as the 10% is nothing to do with corporation tax) then all your SA returns may be wrong. You may have a bigger problem than you realise!
EDIT: Who is doing your accounts and corporation tax? If you have an accountant ask them to explain. If you do the accounts/CT yourself, then your lack of knowledge is quite worrying!
Dividends
Ltd Co makes profit
Pays CT on that profit
Remaining profit after tax can be distributed as a dividend.
This dividend is NET of the 10% tax credit
E.g.
Profit £10,000
CT paid £2000
Retained profit £8000
Dividend paid from company to shareholder £8000
The shareholder has actually received £8888.88, less the £888.88 tax credit. The £888.88 never gets paid, it's notional.
To calulate gross dividend it's £8000 x (100/90) = £8888.88
Gross dividend is the shareholder's income when assessing how much income they've had and therefore whether they are a higher rate taxpayer or not.
Higher rate tax is 25% of the Net dividend recieved (32.5% of the gross, less the 10% tax credit: so it's easier to express as 25% of net!)