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Govt to slash dividend allowance

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Chancellor Philip Hammond has announced he will reduce the dividend allowance from £5,000 to £2,000.

In his Budget speech today Hammond said the dividend allowance, introduced by his predecessor George Osborne, represented an “extremely generous tax break.”

The Chancellor said the move would come into effect in April 2018.

Writing for Money Marketing after the dividend allowance was announced, Helm Godfrey chairman Danby Bloch said: “The first £5,000 of dividends an individual receives is taxed at nil.

“The £5,000 is called an “allowance” but this is misleading. It is not an allowance; it is just a nil rate band. In particular, for example, the £5,000 still counts towards the higher rate threshold.

“The good news for wealthier clients is they get this £5,000 allowance or nil rate band in the same way as non-taxpayers and basic rate taxpayers. So this is a tax cut for them for modest amounts of dividend income.”

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Comments

There are 7 comments at the moment, we would lover to hear your opinion too.

  1. Give with one hand, take with the other. Typical. I suppose this too is to fund long term care.
    Whst difference will this or any of the otyer measures make to th £1.7trillion debt or to our huge deficit?
    As ever all oolitical flim flam.
    We no longer have a Tory party. The Conservatives have taken on the socialist mantle, while the Labour party has now become Communist. Thre seems to be a political vacancy.

    • Yes.
      Democracy always ends up leftwards. We will swing back to the right after the collapse. Give it 30 years, hyperinflation, starvation, then we can rebuild.

  2. And there was me thinking that the allowance was there to at least partially offset the dividend taxation at source, which George Osborne had removed the ability to get credit for.

    So now we go to double taxation on most dividends.

  3. The Labour Party doesn’t need to seek power they are in power already. I have concluded that this Goverment wants to make the pound so worthless that it isn’t worth the while of foreign workers to come here as the money they will send home

  4. Will be of such little value.

  5. This is cowardice. Why bother annoying the likes of Google, Starbucks, etc. when you can pick on reliable, honest taxpayers?

  6. I agree – where did the “entrepeneurs are the future” mantle disappear to ? Has everyone missed the fact that economic growth is still a priority, and just maybe, small business owners are a significant part of that ?

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