Dividend Tax Changes – Reminder

21st March 2016

For those of you running your business through a Limited Company, just a reminder that the new tax on dividends starts on 6.4.16.

Each person will receive a tax free allowance of £5000 for dividends. Tax rates will then be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers.

Consider taking a dividend before 6.4.16 but be careful that this doesn’t push you into the higher rate in 2015/16, as you could end up paying 25% in 2015/16 as opposed to 7.5% in 2016/17.



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