ESM3272 - Particular issues – claims for relief in respect of dividends – claims procedure

Paragraph 13 Schedule 12 Finance Act 2000/Section 58 ITEPA 2003

Regulation 6(3) SI 2000 No. 727

In order to avoid double taxation of the deemed payment, the IR35 legislation provides for a distribution to be made up to the amount of the deemed payment without additional liability arising (see ESM3260 for further guidance on the application of the legislation). A claim has to be made by the company paying the dividend before relief can be given. Relief is given against any dividends paid in- year or subsequently.

The company should make any claim to the HMRC office that deals with its corporation tax affairs and tell us about any dividends it has paid which it wants to be exempted. The claim should include the following information:

• name and tax reference of the company making the claim
• name(s) and tax reference(s) of the person(s) who received the dividend
• amount of the dividend paid to each person and the total amount paid
• date the dividend was paid, and
• amount of the deemed payment and the date on which it was treated as paid.

Relief should be granted to the extent that it is necessary to avoid a double charge to tax (i.e. only to the extent that the distribution matches the deemed payment) and should be given in the following order:

• against relevant distributions of the same tax year before those of other years
• against relevant distributions received by the worker before those received by another person, and
• against relevant distributions of earlier years before those of later years