From April 2016 the Dividend Tax Credit will be replaced by a new tax-free Dividend Allowance. Headline rates of dividend tax are also changing. You’ll pay tax on any dividends you receive over £5,000 at the following rates:
We recommend that you check you have already paid yourself dividends that bring you nearly up to the point where 40% tax comes in. We would also like to point out that it is necessary to complete formal minutes and a dividend voucher accordingly. Failure to do so could lead to HMRC viewing the payment as a loan to you and raise a Corporation Tax assessment on it.
Grey and Green are receiving lots of enquiries from clients about their remuneration arrangements. If you would like to speak with us about tax dividends, please contact us today on 0114 267 0911.