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HMRC internal manual

Employment Status Manual

Managed Service Companies (MSC): Claims for relief in respect of dividends

In order to avoid double taxation of the deemed payment, the legislation allows for a claim to relief to be made where dividends have previously been made. A claim to relief may be made under this Section where the MSC:

  • Is a body corporate
  • Is treated as making a deemed employment payment in any tax year, and
  • Either in that tax year (whether before or after that payment is treated as made), or in a subsequent tax year, make a distribution (“relevant distribution”).

A claim for relief under this section must be made by the MSC by notice to an officer of HMRC within five years after 31 January following the tax year in which the distribution is made.

The company should make any claim to the HMRC office that deals with its corporation tax affairs. The claim should include the following information:

  • name and tax reference of the company making the claim
  • name and tax reference of the person who received the dividend
  • Amount of the dividend paid
  • Date the dividend was paid; and
  • Amount of the deemed payment and the date on which it was treated as paid.