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An outline of the changes to the rules regarding dividends.
eTax ZONE can help taxpayers in the London area with queries you have regarding dividends – here is an overview of the new Dividend Allowance scheme...
A person does not have to pay tax on the first £2,000 of dividend income, regardless of the level of non-dividend income. Tax is charged on dividends received over £2,000 at the following rates:
The Dividend Allowance does not reduce total income for tax purposes, and dividends within the allowance still count towards the appropriate basic or higher rate bands. They may therefore affect the rate of tax payable on dividends received in excess of the £2,000 allowance.
This example, based on 2020/21 tax rates and allowances, shows the taxable amounts.
This example shows a higher rate taxpayer. The Dividend Allowance uses up some of the basic rate band and so less is available to be taxed at 7.5% rather than 32.5%.
eTax ZONE can advise businesses in the London area on a range of tax issues relating to dividends. Please contact us for more information.
If you’re looking to transfer to us from your existing accountant, we can take care of everything for you.
Simply fill in our contact form, and we will get in touch to discuss your needs.
We will then put together a service plan, and request some information about your business.
After this, we will contact your accountant and arrange the transfer on your behalf!