This week we have been talking to clients about the impact the budget may have on them moving forward. Key areas of discussion have been the the New DIVIDEND TAX CREDIT and the way dividends will be taxed moving forward after 1st April 2016.
This new policy for taxing dividends will mean the current tax credit on a dividend is abolished with the first £5000.00 worth of dividends in a year not incurring any tax. After this level the rates will depend on your level of income in the year and any dividends dropping into the basic rate band will be taxed at 7.5%, dividends dropping into the higher rate band will be taxed at 32.50% and for dividends dropping into the additional rate band the rate will be 38.1%.
