Changes to Dividend taxation
Discussion
Eric Mc said:
It will take a while for the full "simplified" system is divulged in detail.
I like the way he has classified the replacing of the current Nil Tax and 32.5% tax on dividends with THREE separate rates of tax plus a special Tax Free Dividend Income Band as being a "simplification".
So I assume something on the lines of:I like the way he has classified the replacing of the current Nil Tax and 32.5% tax on dividends with THREE separate rates of tax plus a special Tax Free Dividend Income Band as being a "simplification".
(Basic Rate band -5000 - personal allowances ) * 7.5%
Very roughly
32000 - 5000 - 10000 = 17000 *7.5% = Extra 1275
PurpleMoonlight said:
Seems it's this:
5K tax free then 7.5%,32.5%,38.1%
Will the corporation tax paid still be deemed to cover the 7.5%? Presumably not.
Most people would receive 10k as salary then the rest as Divis. May be as you say, but easy to get round that to claim your full pa.5K tax free then 7.5%,32.5%,38.1%
Will the corporation tax paid still be deemed to cover the 7.5%? Presumably not.
Edited by PurpleMoonlight on Wednesday 8th July 14:01
essayer said:
PurpleMoonlight said:
All by the sounds of it.
The increase to the employment allowance to £3000 from 2016 is nice too.
...unless the director is the sole employee, in which case ESA can't be claimed...The increase to the employment allowance to £3000 from 2016 is nice too.
Kind of. The company will pay 18% Corporation tax on its profit BEFORE the dividend has been deducted.
The dividend will be taxed in its own "special" way.
In truth, since the introduction of the 10% tax credit system in 1999, the way the dividend was taxed was never seen as being partly covered by Corporation Tax paid by the company issuing the dividend.
The dividend will be taxed in its own "special" way.
In truth, since the introduction of the 10% tax credit system in 1999, the way the dividend was taxed was never seen as being partly covered by Corporation Tax paid by the company issuing the dividend.
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