Don't Forget There May Be Tax To Pay On Your Dividends In January
The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers that means more tax to pay on dividends on 31 January each year.
If you are a higher rate taxpayer and received £22,000 of dividends in 2018/19 only £2,000 of those dividends are tax free now, leaving £20,000 of those dividends to be taxed at 32.5% meaning £6,500 due on 31 January 2020, and possibly payments on account of your 2019/20 liability, unless your tax liability is likely to be lower in 2019/20.
If you require any assistance please contact our Tax Partners, Steve Crompton or Lucy Williams, on the details below:
Partner – Head of Tax
direct dial: 01942 292541
mobile: 07790 840394
direct dial: 01942 292543
mobile: 07807 053494