LB Group
Professional, Proactive, Partner-led advice
IPSWICH
01473 359720
COLCHESTER
01206 867551
CHELMSFORD
01245 254780
LONDON
0208 221 8282

Professional, Proactive,
Partner-led advice

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LONDON: 0208 221 8282
CHELMSFORD: 01245 254780
COLCHESTER: 01206 867551
IPSWICH: 01473 359720

Email: info@lbgroupltd.com

TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

THERE MAY BE MORE 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 there will be more tax to pay on those dividends on 31 January 2018.

Up until 5 April 2016, the 10% dividend credit meant that basic rate taxpayers paid no tax at all on dividend income as the 10% tax on dividends was covered by the 10% tax credit. For example, where a basic rate taxpayer received £9,000 dividends, this would be treated as £10,000 gross income but the 10% tax of £1,000 would be covered by the £1,000 tax credit. From 6 April 2016 the same £9,000 dividend would now be taxed at 7.5% once the £5,000 dividend allowance has been used making £300 tax due on 31 January.

Where dividends are received by a higher rate taxpayer, the loss of the 0% tax credit means that the full 32.5% rate applies to dividends in excess of the £5,000 allowance.

Thus, if a higher rate taxpayer received £30,000 of dividends, £25,000 of those dividends would be taxed at 32.5% meaning £8,125 due on 31 January 2018. Last year the tax on the same dividends would have been £7,500 after deducting tax credits.

If you can let us have all of your tax documents as soon as possible, we can let you know how much tax you need to pay next January so that you can set aside sufficient funds.

TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

LB Group accountants in London, Essex and Suffolk can assist with this. Local Accountants and Tax Advice.

LB Group Chartered Accountants are a top 75 Firm in the UK of Accountants providing Audit, Tax and Advisory Services across a variety of industries.

With offices in London, Chelmsford, Colchester and Ipswich our partner led approach with fixed fee options provides a professional and proactive service to both business and personal clients.

Professional

LB Group Chartered Accountants offer customised Accountancy, Audit and Tax solutions along with other Advisory Services including Corporate Finance, Insolvency and Financial Solutions tailored to meet your needs.

At LB Group, we are passionate and committed to providing excellent customer service for each and every client. Our organisation is built on strong relationships with our customers and business associates.

TAX TO PAY ON YOUR DIVIDENDS IN JANUARY

 

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