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An outline of the changes to the rules regarding dividends.
Blue Spire can help taxpayers in the Chichester & Brighton 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%.
Blue Spire can advise businesses in the Chichester & Brighton area on a range of tax issues relating to dividends. Please contact us for more information.
23 Nov 2020
HMRC has started writing to 4,000 businesses in the hospitality sector requesting them to verify their claims made under the government's Eat Out to Help Out scheme.
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