The much heralded attack on the self-employed and one man companies is likely to have a wider impact on all shareholders, it was announced in Wednesday’s Budget.
Increases in the rates of NIC payable by the self-employed were announced as 1% in April 18 and 1% in April 19 although the House of Commons may change this.
From April this year, the rate of tax payable upon dividends has increased by 7.5% across all tax bands. As an example, the tax payable by a higher rate taxpayer will increase from 25% to 32.5%. To partially compensate for this increase a dividend allowance of £5,000 was also introduced.
From April 2018, the dividend allowance will be reduced to £2,000 which will increase the tax burden for the typical small business shareholder by £225. HMRC’s estimates suggest that this change will bring in a further £900m of tax each year.
Read more about this and other announcements in our Budget Report.
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