From April 2016, dividends will be subject to a far more punitive tax regime. Now you have the chance to sign an online petition urging the Government to reconsider the new rules.
Tax changes announced
At the Summer Budget, the Chancellor unveiled a new form of dividend tax, which would do away with the current system of tax credits, in favour of a simpler set of dividend tax bands, for basic, higher and additional taxpayers.
Initially, most commentators believed that the tax hit would be softened by the introduction of a £5,000 ‘dividend allowance’, however it now appears that this so-called allowance is nothing of the sort, and merely sits within taxpayers’ existing tax bands.
As a result, a typical company owner with a £8,000 salary and £50,000 in dividends will pay over £2,000 in additional tax from the next tax year onwards.
Online petition set up
Clearly, this new tax will hit small business owners hard, and seems very ‘unConservative’ in many ways. As a result, an entrepreneur, Frauke Golding, has set up an online petition calling on the Chancellor to ‘reconsider the new dividend tax for small businesses.’
The proposer points out that business owners work long hours, take risks, and don’t enjoy any of the perks associated with traditional employment, and that “there is a real danger that this new tax, along with auto enrolment and minimum wages increases, will have a significant effect on those people brave enough to start up a business.”
It is worth adding your signature if you disagree with the proposed tax. At the time of writing, the petition was almost at the 10,000 signature mark which will automatically generate an official response. At 100,000 signatures, the petition would also be considered for a Parliamentary debate.