Are Dividends Included in the CT600?

Dividends paid to shareholders are not included in your CT600 corporation tax return. This is one of the most common questions for owner-managed companies.

Why Dividends Are Not in the CT600

Your CT600 calculates corporation tax on your company's taxable profits — the income the company earned, minus allowable expenses. Dividends are payments made from post-tax profits to shareholders. They are not a business expense and have no effect on taxable income.

The sequence is:

1. Company earns income
2. Allowable expenses are deducted → gives taxable profit
3. Corporation tax is calculated on taxable profit
4. Tax is paid to HMRC
5. What's left is post-tax profit — the company can then pay dividends from this

What to Do if You Paid a Dividend

Nothing — you do not need to enter dividends paid to shareholders anywhere in TinyTax. Simply leave the dividend income field blank (or at £0) unless your company received dividends from another company.

Dividend Income Received by Your Company

If your company received dividends as income — for example, from shares held in another company — this is different. You should enter this in the Dividend income field in the P&L section. Most small trading and property companies do not have this.

Common Questions

Does paying myself a salary affect the CT600?

Yes — directors' salaries are an allowable business expense and reduce your taxable profit. Enter them under Staff costs in the P&L section. Dividends are separate from salary and do not reduce profit.

Should I enter dividends as a disallowable expense?

No — only enter something as disallowable if you already included it as an expense in your P&L (for example, client entertaining or personal costs). Dividends should not appear as an expense at all.

My accountant listed dividends in my accounts — why are they not in the CT600?

Dividends appear in your company's statutory accounts as a distribution, but they do not appear in the CT600. Your accounts and your CT600 serve different purposes. TinyTax handles both correctly — dividends paid are not part of the CT600 calculation.