Dividend Tax Rates Increasing from 2022/23

It is also proposed that there will be a 1.25% increase in the rate of tax payable on dividends received by those who own shares in companies.

This would mean that after the £2,000 tax free dividend allowance the rate of tax would be 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for those with income in excess of £150,000 a year.

This will catch many family company director/shareholders who traditionally “pay” themselves by taking a low salary and larger dividends to minimise NICs.

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