Government have changed the way dividends are to be taxed. These changes will come into effect on 6th April 2016.
Who are government targeting with these changes?
These changes are targeted at small business owners, including contractors who operate as a personal service company. Those who operate outside of IR35 and pay themselves a small salary and a large dividend payment will be most affected.
What will be the financial impact of these changes?
This will depend of course on your level of taxable income, however as an example, a higher rate taxpayer who draws dividends totalling £50k for 2016/2017 should expect to pay an additional £2,575 as a result of these changes.
Need assistance with your particular circumstances?
For help understanding the dividend tax changes and how these affect you, please contact one of the team on +44(0) 208 735 6370.