and I voted the tories in!
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Dividends beyond £5k taxed wef 2016!!
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Mr Osborne says the dividend tax system is "complex and archaic". He's replacing dividend tax credit with a tax-free allowance of £5,000 of dividend income for all taxpayers.
The rates of dividend tax will be set at 7.5%, 32.5% and 38.1% -
Good news as well
Corporation tax down again
Posted at 13:19
Mr Osborne has been cutting corporation tax. It's now at 20%. But he's cutting it again! 19% in 2017 in a bid to create more jobs. It will then fall to 18% by 2020.Comment
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Does that apply to us smaller Ltd's not (yet) earning 300k?
Originally posted by Eirikur View PostGood news as well
Corporation tax down again
Posted at 13:19
Mr Osborne has been cutting corporation tax. It's now at 20%. But he's cutting it again! 19% in 2017 in a bid to create more jobs. It will then fall to 18% by 2020.Comment
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....
Originally posted by oliverson View Postand I voted the tories in!Comment
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[copied from the "Wot no budget thread?"]
What are the thresholds for these dividend tax rates? Is there a summary page somewhere?
If the increases are that drastic, bringing them more into line with income tax + NI, then surely IR35 must be pretty much a dead letter.Work in the public sector? Read the IR35 FAQ hereComment
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https://www.gov.uk/government/upload...Accessible.pdf
see page 45:
1.188 The government will set the dividend tax rates at 7.5% for basic rate taxpayers,
32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. While these
rates remain below the main rates of income tax, those who receive significant dividend income
– for example due to very large shareholdings (typically more than £140,000) or as a result of
receiving significant dividends through a closed company – will pay more.
1.189 These changes will also start to reduce the incentive to incorporate and remunerate
through dividends rather than through wages to reduce tax liabilities. This will reduce the cost
to the Exchequer of future tax motivated incorporation (TMI) by £500 million a year from 2019-
20. The tax system will continue to encourage entrepreneurship and investment, including
through lower rates of Corporation Tax.Comment
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Could be worse, if you can keep your combined divi and salary payments below the Higher rate (£42,385 atm) threshold then yes you will pay more, but it's not catastrophic. 7.5% rather than 32.5%.
What it will lead to is more income shifting with partners taking divi's up to the limit as well as this will still be the best way to minimise tax due.
NI allowance is going up to £3000 as well, so there may be some room for mitigation based on that."Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.Comment
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