Today's BBC Moneybox programme (Personal and Small Business Tax)

[cojak]

A very interesting listen - and you may be a be surprised when they talk about the dividend tax.

Also BTL landlord tax advice.

BBC Radio 4 - Money Box, Money Box Live: Personal and Small Business Tax

[SteelyDan]

A very interesting listen - and you may be a be surprised when they talk about the dividend tax.

Also BTL landlord tax advice.

BBC Radio 4 - Money Box, Money Box Live: Personal and Small Business Tax

Yeah, sounded quite encouraging, relevant bit (for me) was at 19:25-23:22 in relation to dividends

[Underbase]

Yeah, sounded quite encouraging, relevant bit (for me) was at 19:25-23:22 in relation to dividends

So what they seemed to be saying, (who knows if they are correct). Is that the 5k div tax free allowance is totally outside of any bands. So in their scenario (forget the personal allowance and any salary) you could take the full basic rate tax limit with 7.5% plus 5k with zero percent. If that is true (which I have no idea at the moment) then it would be a little bit of good news.

[PerfectStorm]

How is this news?

[Underbase]

How is this news?

News to me. I assumed the 5k would still count as part of your income band. But they appear to be saying its more like isa income and totally outside. Good news if it is.

[jamesbrown]

News to me. I assumed the 5k would still count as part of your income band. But they appear to be saying its more like isa income and totally outside. Good news if it is.

There was an explicit example in the budget speech whereby 17k could be taken tax free in any given year as of next April. The implication being: 11k personal allowance, 5k dividend allowance, and 1k in tax free interest.

[Underbase]

There was an explicit example in the budget speech whereby 17k could be taken tax free in any given year as of next April. The implication being: 11k personal allowance, 5k dividend allowance, and 1k in tax free interest.

Yeah that I get, but have you then used 17k (or 16k if we ignore the tax free interest) towards the lower tax bracket, or have you only used 11k.

[WordIsBond]

Yeah that I get, but have you then used 17k (or 16k if we ignore the tax free interest) towards the lower tax bracket, or have you only used 11k.

Maybe even George Osborne doesn't know the answer. This whole thing was not well thought out.

[Kenny@MyAccountantFriend]

The basic rate tax band is 32k next year and the personal allowance is 11k. Total being the 43k figure often referred too.

As most people recieve the personal allowance a lot of guides are based on the 43k figure.

When in reality the personal allowance and soon to be dividend allowance should be separate.

With the loss of the tax credits on dividends you could actually take 37k in dividends with an 11k salary next year and not go into the higher rate band.

If you draw the full allowances per the above your increase in tax is only about £500 based on drawing the same under the current rules (although I know a lot of people wouldn't have as it would have taken them into the higher rate tax bracket currently)

This is my understanding of the changes and is liable to change based on two more budgets before they are due to take effect.

[Underbase]

Yes that was my understanding. However the radio show seemed to imply that you could take the 11k, and the 5k and then the 32k basic rate. Eg a figure of around 48k as the "basic rate" people think of. Me personally i am just more confused and i expect it is as was said earlier. No one knows yet, not even Georgie. We will see when HMRC telease thier guide