Summer Budget 2015 – Corporate business owners

Company Owner Manager basic tax planning hit

Many corporate business owners choose to reduce their tax bill by taking only a small salary, but withdrawing company profits by way of a dividend. At present, if you are a basic rate taxpayer, the tax credit that comes with a dividend ensures that you have no further liability to pay. However, from April 2016, the dividend tax credit is to be abolished altogether.

In its place, there will be a new Dividend Tax Allowance of £5,000 and then special rates for the taxation of dividends of 7.5% for basic rate payers, 32.5% for higher rate payers and 38.1% for additional rate payers.

If you would like more information on this subject, or anything else covered in the Summer Budget 2015, please contact a member of the Tax Team in your local office – or email us at action@wrightvigar.co.uk – we would be delighted to help you.