The budget proposals announced on 8 July 2015 included a significant change to the way in which dividends will be taxed as from 6 April 2016. It is an attempt by the Government to recoup some of the national insurance they deem to have been lost through director/shareholders taking dividends rather than salary. At the moment very little detail has been announced, but on the basis of what we know so far this will lead to significant additional tax for anyone whose dividend income exceeds £5,000.
Obviously this is a significant attack by the Government on the use of dividends and we will be looking at potential ways to mitigate this tax levy before the inception date of 6 April 2016. We will be in touch with all of our affected clients once we have more information from HMRC and we have some concrete proposals.