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An outline of the changes to the rules regarding dividends.
Blue Spire can help taxpayers in the Brighton area with queries you have regarding dividends – here is an overview of the Dividend Allowance scheme...
From 2023/24 a person does not have to pay tax on the first £1,000 of dividend income, regardless of the level of non-dividend income. This Dividend Allowance has reduced from £2,000 in 2022/23 and will decrease further to £5,000 in April 2024.
For 2023/24 tax is charged on dividends received over £1,000 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 £1,000 allowance.
This example, based on 2023/24 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 8.75% rather than 33.75%.
Blue Spire can advise businesses in the Brighton area on a range of tax issues relating to dividends. Please contact us for more information.
26 May 2023
The government's Tax-Free Childcare (TFC) initiative helped 649,935 families to save on their childcare costs during the 2022/23 tax year, HMRC has revealed.
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