Watch my video to see how this new dividend tax will affect you as a basic rate taxpayer after 6 April 2016

In summary

  • Everyone will receive the £5k tax free allowance
  • This will only apply once your income has exceeded the personal allowance limit (£10.6k 2015/16)
  • Above that income the dividend tax will be 7.5%
  • If a business owner takes the maximum “small salary and dividend” as a basic rate taxpayer they will pay an extra £2k tax
  • So in January 2018 they could pay an additional
    • £3k including the following year’s payment on account, and
    • £1k payment on account in July 2018
  • The next part of the series is on the situation for higher rate taxpayers

This is a brief summary of the new dividend tax rules for basic rate taxpayers which will apply from 6 April 2016 and you should seek professional advice before taking any steps based on the contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”

Thanks for the credit music to Simon Luckhurst, owner of Whisper Audio Ltd – an audio production company which specializes in international voice over and video localization.  Clients include multinationals, local businesses and individuals.