Chancellor announced dividend tax hike from April 2016

        4387 views

Most small Ltd Co owners with low salary high dividend income extraction will see a hefty personal tax hike.

Ignoring £5k tax free allowance, dividend tax rate will increase by 7.5% across all income levels.

MVL Online has outlined some of the proposed changes in the article below.

 

 

 

Proposed changes:

- Scrapping 10% notional tax credit

- Instead £5,000 dividends tax free, then

- Dividends taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate and 38.1% for additional rate

How much has it changed:

- Basic rate has changed from 0% to 7.5%

- Higher rate has changed from 25% to 32.5%

- Additional rate has changed from 30.6% to 38.1%

There seems no easy way to avoid this for an ongoing business, other than simply taking less money out now or accepting the higher personal tax.

Alternatively, if you’ve got a company with lots of cash and you’re perhaps considering doing something else, it’s worth looking at the option of a solvent liquidation.

Source: Research

Latest Posts

About Us

IT Contractors UK is one of the leading information and resource portal for IT Contractors in the UK. We provide a variety of services to IT Contractors such as IT Jobs, Forum, list of Accountants & Umbrella Service providers, Recruitment Agencies, Insurance, Contractor Mortgages and more.

Copyright 2024. All content copyrighted by IT Contractors UK. Website Design by ThinkWeb Solutions
We have updated our cookie policy to reflect new guidelines.