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Cheltenham: 01242 260066 | Bristol: 0117 933 5710 | Email email@example.com
Mitchells can help taxpayers in the Cheltenham and Bristol 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 example, based on 2020/21 tax rates and allowances, shows the taxable amounts.
This example shows a higher rate taxpayer. The Dividend Allowance uses up some of the basic rate band and so less is available to be taxed at 7.5% rather than 32.5%.
Mitchells can advise businesses in the Cheltenham and Bristol area on a range of tax issues relating to dividends. Please contact us for more information.
26 Jan 2021
Self assessment taxpayers will not be fined for late online returns if they file by 28 February, HMRC has said.
25 Jan 2021
The Low Incomes Tax Reform Group (LITRG) has urged the government to raise the High Income Child Benefit Charge (HICBC) threshold to avoid it affecting basic-rate taxpayers for the first time in April.