Dividends beyond £5k taxed wef 2016!!

[oliverson]

and I voted the tories in!

[Eirikur]

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%

[Eirikur]

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.

[DimPrawn]

and I voted the tories in!

[AJ1982]

Does that apply to us smaller Ltd's not (yet) earning 300k?

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.

[tractor]

....

and I voted the tories in!

Will you people never learn? Doesn't matter who you vote for, you always get the government!

[OwlHoot]

[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.

[FarmerPalmer]

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.

[TechJinx]

time to give those Isle of man EBT people a call....

[DaveB]

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.