Category: Small Business

  • Dividend Tax Allowance Reduction in 18/19 Tax Year

    By Tim Haggard

    In 2016, then Chancellor George Osborne effectively increased the tax on dividends from UK companies, by removing the dividend tax credit, the net effect of which was a new basic rate of 7.5%, and a higher rate of 32.5%, albeit with a new tax-free allowance. At the time of introduction, the tax-free allowance was set at £5,000 and this continued until the end of March 2018. In the Finance Bill of 2017 current Chancellor Philip Hammond announced that the allowance would be reduced to £2,000 from 5th April 2018.

    Whilst the dividend tax ...