Dividends Tax Increase

In addition to the increase in NI rates, it has also been announced that Dividend tax will also increase by 1.25% from 6 April 2022.

The new dividend tax rates, which will apply across the UK, are:

• Basic rate - 8.75% (Currently 7.5%)

• Higher rate - 33.75% (Currently 32.5%)

• Additional rate - 39.35% (Currently 38.1%)

The 1.25% tax rise will apply to dividends above the tax bands in future years, the government has not yet provided details of the proposed tax bands for 2022-23.

The £2,000 Dividend allowance will continue to be available and dividends received by ISA’s will remain tax-free.

If you would like a chat with us to discuss how these changes affect you and your business, get in touch

Pete PJL Accounts Ltd 07733102617 Pete@pjlaccounts.co.uk