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An outline of the changes to the rules regarding dividends.
Tamara Harrison and Co can help taxpayers in the Devon 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 is a quite straightforward example, based on 2019-20 tax rates and allowances, showing the taxable amounts after allocating the relevant allowances to the two types of income.
This example is more complicated, in that it splits the dividend allowance into two - £1,500 to use up the balance of the basic rate band and £500 to 'eat into' the higher rate band.
Tamara Harrison and Co can advise businesses in the Devon area on a range of tax issues relating to dividends. Please contact us for more information.
We understand that these are concerning times for all our customers, both on a personal and a professional level. We hope that it is of some reassurance that we do not foresee any significant risk to our ability to continue to support our customers and meet our obligations.
We have taken the precaution of suggesting all our employees work from home in order to avoid any unnecessary travel and contact with others and are now taking this further by closing the office; we do have well established home working environments to ensure we remain fully responsive by email, but there may some delay with answering the telephone.
Please check the ‘News’ section on our website https://www.thandco.uk/news/hot-topics for the latest updates on government plans to support businesses in these tricky times, or of course you can always phone us on 01626 610071 or email email@example.com
With prior arrangement we can arrange video calls if required too.