Changes in taxation of Dividends
As from 1 April 2016 big changes are being brought in that will affect all small companies where previously directors received a salary and dividends from their company. Where previously no addittional tax was payable on dividends received as long as you were a basic rate tax payer, as from the start of the 2016 tax year, everyone will be entitled to receive up to £5,000 in dividends tax free. Any dividends in excess of this will incur a 7.5% tax charge if you are a basic rate tax payer.
Use the following links below to see how it may affect your tax liability for 2016-17.