Thursday, May 6, 2021

East Mids business owners to be hit by dividends shake-up, says local expert

Business owners across the East Midlands are to be hit by a change to the dividend rules announced at last month’s budget says a local taxation expert.


Simon Browning, tax partner at UHY Hacker Young in Nottingham, believes that the changes will mean higher tax bills for most business owners who extract profits by way of dividend when the new rules come into force next April. He said: “The changes to taxation of dividends is a huge shake-up which will impact all company shareholders across the East Midlands and has certainly got taxpayers and advisors reaching for their calculators to work out the most efficient dividend policy. “At the moment, basic rate taxpayers don’t pay any tax on dividends, while those paying the higher rate pay an effective rate of 25 per cent with additional rate payers paying 30.56 per cent but from April 2016, the first £5,000 of dividend income will be tax-free then basic rate taxpayers will pay 7.5 per cent, higher rate 32.5 per cent and additional rate 38.1 per cent. “What this will likely mean in most cases is an increase in taxation and higher liabilities for most business owners who extract profits in this way, so questions are being asked about what is the most effective dividend policy and we are also being asked to consider whether or not business owners should extract profits before 6th April 2016 under the existing regulations. “It’s challenging as we do not yet have the precise details of how the new rules will interact with taxpayer’s other income and cannot answer questions with certainty yet, but there is no doubt that businesses across the East Midlands will be affected by this.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close