tax credits (again) and dividends

[Helenfellows32]

i currently receive only the family tax credit part of tax credits as my dd was earning over the threashold and i wasnt working. recently he has started his own business with a massive salary drop but taking a monthly dividend as this is better to save on tax. the thing is as the dividend he receives has already had the tax paid on it do we include this as taxable income for the tax credits application? very confused can any one shed any light on this.

I don't know about the tax credit application specifically, but Dividends are taxable income. The fact that they have already had 10% tax deducted is a bit like a salary that's had PAYE deducted at source. If you are a higher-rate taxpayer you declare them as taxable income, and have to pay the difference in tax up to your higher rate.

There's a section on the tax credits form which includes dividends, it's something like first £300 can be ignored then anything over that must be included.