Own or run a company? Taxation on your dividend payments has changed

If you’re a company owner and/or director then you need to be aware of a recent Government move which has changed the way you can take funds out of your business.

Although designed to simplify the process, it is suggested that this will have the biggest impact on smaller SME companies.


Changes to your dividend payment

From April 2016 the Government has increased tax rates on personal dividends (above £5k) up to 7.5% basic rate, 32.5% higher rate and also 38.1% additional rate.

You therefore need to be sure that if you have reserves (accumulated profit) you manage that pot in the most tax efficient way and extract any dividends in a safe and HMRC compliant way.


Help to find the best way

Here at Aspirations Accountancy we can help you do this and it’s all about identifying the best personal dividend/ payment options relating to your goals and individual circumstances.

For example, there are alternative payment options such as pension schemes (for those over 55) and ISAs that are unaffected, as well as other options that the Government has designated as tax or NI free.


Further changes on the way

Watch out too because further changes in income tax and capital gains tax relating to when a company is sold or wound up (as well as the way that company profits are accounted) are also in the pipeline.


We can help

To ensure you’re on top of the latest dividend payment changes and to ensure you get the very best personal financial benefit, please talk to Aspirations Accountancy on 01634 298238.

You can also email info@aspirationsaccountancy.carciofinodev.co.uk .


Disclaimer: Articles are accurate at the time of posting but may be affected by legislative changes and individual circumstances.  Please always contact us for personalised advise and assistance.