Important reminder: dividend tax changes from 6 April 2016

The reason for this short article is to remind you of the changes to dividend tax that are due to come into effect from 6 April 2016 – a little over three weeks away.

The main change is that rate of income tax applied to dividends will increase by 7.5%, although no tax will be charged on the first £5,000 of dividend income.

The second link includes some worked examples highlighting the additional tax due (if any) on varying levels of dividend income. What we are seeing is that where owner managed companies have existing post-tax reserves/profits then consideration is being given to additional dividends being declared in this tax year (2015/16) before the 5 April when the changes apply.

Please contact your usual Hawsons contact (or your nearest office) if you wish to discuss this further or you wish to declare a dividend before the changes so that we can assist you in putting together the correct paperwork.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on sac@hawsons.co.uk or 0114 266 7141.[/author_info]