Tax credit (in relation to dividends) definition

What does Tax credit (in relation to dividends) mean?

A UK individual is charged to income tax on the amount of the dividend received by them from a UK company, plus a notional tax credit equal to one ninth of the dividend received. For example, a UK individual who receives a dividend of 90 must report a dividend of 100 (being 90 plus the tax credit of 1/9 of 90, ie 10) in his tax return. This means that a basic rate tax payer will pay no further tax on the dividend.

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