Challenging the Dividend Tax

Challenging the Dividend Tax

Didn't find your answer?

Hi all,

Please join us in trying to raise awareness of the new dividend tax and support business owners to challenge this tax impacting small businesses the hardest.

Here is a copy of the email sent to my client base - please consider sending something similar to yours to enable us to get the votes we need to have this tax fully debated in parliament.

Dear Clients and friends,

Over the course of the last few months you may have heard me talk about the proposed dividend tax to apply from next April onwards. More detail can be found here: http://www.telegraph.co.uk/finance/personalfinance/investing/shares/11737430/New-dividend-tax-how-it-works-and-how-to-avoid-it.html

You will have also heard me say why I feel that this is an unfair tax.

As small business owners we take a significant amount of risk in operating our businesses, we provide employment, stimulate the economy and in tough times take very little money out of our business in consideration of the time put in. The reward for this level of risk and investment is dividend income. Traditionally small companies have been supported by a lower rate of Corporation tax but now the reduction in tax on large companies is forcing the government to look to smaller businesses to make up the shortfall.

This change combined with the increase in minimum wages, auto-enrollment costs and the abolition of reimbursement of statutory sick pay will serve to make running a small business harder and less profitable than ever and it is less likely that we will be able to continue to compete with larger companies who are benefiting from a reduction in tax.

The difficulty in fighting this is that public understanding of the tax and the implications is limited. Often our own employees perceive that we must be making massive profits from our businesses when this is often not the case.

I urge you to stand with me in objecting to this tax by signing this petition and raising awareness with your workforce and all your connections that this tax combined with the other changes will put jobs at risk for all those working in small businesses and ask them to sign this petition too at the below link. Even if you operate as a sole trader and a partnership, I would urge you to stand shoulder to shoulder with other small business owners in adding your voice in objecting to this tax. You will have customers and suppliers that are limited companies and their viability may be compromised by this tax which will have a knock on effect.
https://petition.parliament.uk/petitions/106525

If you are a limited company, I hope that I have had an opportunity to discuss the personal implications of this tax with you since the budget announcement in June but if you have any concerns about how this will effect you personally and how you can plan for it please don’t hesitate to get in touch.
 

Replies (7)

Please login or register to join the discussion.

By cheekychappy
18th Nov 2015 16:15

I wouldn’t send this to my clients, nor would I urge them to sign a petition.

My role is as a trusted adviser, and not a political activist.

I still don’t consider the proposals wholly unfair either.

Thanks (9)
Portia profile image
By Portia Nina Levin
18th Nov 2015 16:22

Have you thought about taking your small business offshore? They are doing it in Wales, so it must work.

Thanks (2)
Stepurhan
By stepurhan
18th Nov 2015 16:35

Poorly worded

I was aware

It is a very poorly worded petition, largely relying on emotive language. It does not put forward any concrete reason for overturning the proposals. It makes sweeping assertions about business owners which are patently not true for many I have met. It ends with a vague threat.

Even if I thought online petitions worked (which I don't) I wouldn't support this one.

Thanks (3)
Teignmouth
By Paul Scholes
18th Nov 2015 18:24

Door, Horse & bolted

I've already told all mine to a lot of shrugging shoulders, partly due the fact that I told many of them nearly 20 years ago that the "dividend" fiddle was bound to be short-term.

I'm therefore in the cheekychappy camp and get far more animated about GO's cuts to tax credits, even if it puts me in the same camp as Boris....shudder.

 

Thanks (2)
By ireallyshouldknowthisbut
18th Nov 2015 19:05

.

There is no real logical reason why small ltd co's pay a lot less than than sole traders do, or employees for that matter. 

It is a a good thing has ended, not a bad thing that has happened. 

There is a actually an argument for paying more tax as a ltd co in return for limited liability.

From a personal point of view its not very pleasant, but that is all.

 

Thanks (1)
By Tim Vane
18th Nov 2015 19:37

@OP - you have just turned up to a party 3 months late, shouting belligerent curses at some imagined slight and impotently waving your fists in the air.

We've all moved on.

Thanks (2)
By JimH
18th Nov 2015 21:51
Thanks (0)