I have just started doing tax returns for some non-residents. They have a basic salary from the UK and dividend income from their own limited company. I was surprised to see that after calculation of the tax, the tax return has added a line stating 'minus 7.5% tax treated as paid on dividends from UK companies (not repayable)'. This has in effect reveresed the tax charged on the dividends.
I was not aware of any changes to the way dividends were being taxed for non-doms from 17-18. Has anybody else come across this? and is it correct?
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Yes it is correct, and yes you are right that there have not been any changes. Hence the tax credit, which was ever thus. Are you even sure the salary should be taxed if they are non resident?
Are you reading the pre-FA 2016 version or the post-FA 2016 version? It's just that in my post-FA 2016 version there is no subsection 5 in section 399. It jumps from subsection 2 to subsection 6 for some peculiar reason.