HMRC Closures
At present, we are on hold between 45-60 minutes for every phone call to HMRC and this is likely to get worse in the next few weeks.
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Who we are
About us
We're more than just accountants. We care about our clients and build long term relationships.
Client stories
We work with some great clients. Read about their challenges and how we have helped them.
Meet the team
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Business sectors we support
We have a range of clients. No two projects are the same, and every day we solve fresh challenges.
Join our team
If you want to join an enthusiatic team and continue your learning we'd love to hear from you.
- What we do
Taxation for individuals and trusts
Be compliant - we know the rules.
Audit and assurance services
Navigate regulatory complexity - we provide the expertise.
Accounting and taxation for business
Focus on your business - we'll manage the books and tax.
Charity and community interest companies (CICs)
Accounting for good - we have experience of CICs.
International accountancy services
Remove the hassle - let us take care of your International tax and accounting.
Bookkeeping, VAT, cloud accounting & payroll
Reduce the pain - we can handle your monthly calculations.
Tax planning
Reduce your tax liabilities - we'll show you how.
Business advisory and wealth creation
Grow your business and wealth - we know what it takes.
How are Dividends taxed?
Correct at the time of posting, March 1, 2023Dividends are paid to shareholders of companies out of the annual profits those companies make.
Companies don’t have to declare a dividend, but generally choose to do so, particularly if they want to attract new investors or provide a return to the owners.
Whether you are an investor, with directly held shares in a company, or an officer or employee who has been awarded shares in the company you work at, the rules on dividend tax and tax allowances remains the same and is determined by a number of factors:
- Your overall taxable income
- The amount you are paid in dividends
- Your tax Band
Dividend payments are taxable, but there is an annual allowance and specific rates of tax apply depending on what tax Band you are in.
For instance: the current annual allowance, for 2022/23, is £2,000, as it has been for a number of years. This reduces to £1,000 for Tax Year 2023/24 and again to £500 for 2024/25. This allowance is in addition to the allowance on Income tax, of £12,570 and you can use both.
Tax on Dividends is 8.75% for Basic Rate tax payers, 33.75% for Higher Rate payers, and 39.35% for those falling into the Additional Rate bracket.
The key thing is to make sure that you are taking full advantage of what allowances there are available to you each year, as they can’t usually be carried forward.
There are tax planning opportunities to consider, such as including other family members in the ownership of your company to make use of available lower rate tax bands and therefore minimise the overall tax rate paid on dividends within the family.
At Dominic Hill we have experts in tax and tax allowances who can advise you on what your options are, depending on your personal circumstances and your income.
Related Posts
Spring Budget Update!
1. The VAT registration threshold has been raised from £85,000 to £90,000. This means for businesses who’s annual turnover was starting to get near that limit, there is a little bit more breathing space. This wasn’t quite the VAT rate reduction we were hoping for but it’s a move in the right direction
Dividends allowance update!
With the increase in corporation tax rates in 2023, we are now having to consider each client individually to see whether the combination of corporation tax and personal tax on dividends is still the most tax efficient way to extract money from a business.
- What we do