dividends tax petition

dividends tax petition

Didn't find your answer?

https://petition.parliament.uk/petitions/106525/

I am encouraging my clients to sign it

one thing they have omitted to say is that the new tax is a tax in income which has already been taxed....

Replies (23)

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By Tim Vane
03rd Feb 2016 11:53

Posted back in August.

https://www.accountingweb.co.uk/anyanswers/question/dividend-tax-petition

And the petition is just as dumb an idea now as it was then.

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Replying to bernard michael:
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By Mr_awol
03rd Feb 2016 12:00

Agreed

Tim Vane wrote:

Posted back in August.

https://www.accountingweb.co.uk/anyanswers/question/dividend-tax-petition

And the petition is just as dumb an idea now as it was then.

 

What Tim said.  With a cherry on top

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Replying to paulcolman:
By cheekychappy
03rd Feb 2016 12:03

Don't

Mr_awol wrote:

Tim Vane wrote:

Posted back in August.

https://www.accountingweb.co.uk/anyanswers/question/dividend-tax-petition

And the petition is just as dumb an idea now as it was then.

 

What Tim said.  With a cherry on top

 

Forget the cream.

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By Duggimon
03rd Feb 2016 11:55

It's been around for months

And probably isn't going to get to 100K signatures. Even if it does there's very little chance of it even being debated let alone result in changes to the 2016/17 tax rules at this point.

Not to say I'm in favour of the changes, just that I don't think there's any way this will have any kind of effect, even if it somehow gets as many signatures in the next three weeks as it did in the first five months.

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By Ruddles
03rd Feb 2016 11:55

Tax on income which has already been taxed

Just as it always was.

I have many clients that are going to be better off - I'm not rushing to encourage them to sign the petition.

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Replying to Tax Dragon:
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By legerman
03rd Feb 2016 12:58

Better off?

Ruddles wrote:

I have many clients that are going to be better off - I'm not rushing to encourage them to sign the petition.

How does that work?  After the first 5k, there is a 7.5% tax charge for basic rate tax payers.  In the higher bands the removal of the tax credit has the same affect.  Every example I've seen leaves you worse off on dividends over 5k.

 

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Portia profile image
By Portia Nina Levin
03rd Feb 2016 11:56

Somebody shoot me!

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RLI
By lionofludesch
03rd Feb 2016 12:39

"You never had it so good"

Folk paid by dividends have done very well over the past 40 years.

Stop whinging - they've caught up with you.

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Replying to Jason Croke:
paddle steamer
By DJKL
03rd Feb 2016 13:12

Come on, 40 years is pushing it

lionofludesch wrote:

Folk paid by dividends have done very well over the past 40 years.

Stop whinging - they've caught up with you.

Come on, 40 years is pushing it, not sure dividends were favourably treated in the 1970s with the 15%  investment income surcharge.

Edit- Interesting, having now  looked it up in my 1981 textbook. the book says

"where an individual has investment income of over £5,500 an additional rate known as investment income surcharge, of 15% is charged on the excess."

Strange resonance with the new regime, just reduced the band from £5,500 to £5,000 after 30 odd years of inflation!!!!

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Replying to Tax Dragon:
RLI
By lionofludesch
03rd Feb 2016 13:10

Fair point - or is it ?

DJKL wrote:

lionofludesch wrote:

Folk paid by dividends have done very well over the past 40 years.

Stop whinging - they've caught up with you.

Come on, 40 years is pushing it, not sure dividends were favourably treated in the 1970s with the 15%  investment income surcharge.

Fair point - but repealed by Thatcher's government at the earliest possible opportunity - in 1980, if I remember right.  So, 36 then.

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Replying to 356B:
paddle steamer
By DJKL
03rd Feb 2016 13:20

1983/84 was last year

lionofludesch wrote:

DJKL wrote:

lionofludesch wrote:

Folk paid by dividends have done very well over the past 40 years.

Stop whinging - they've caught up with you.

Come on, 40 years is pushing it, not sure dividends were favourably treated in the 1970s with the 15%  investment income surcharge.

Fair point - but repealed by Thatcher's government at the earliest possible opportunity - in 1980, if I remember right.  So, 36 then.

It appears to have gone in 1983/84, which makes sense to my timeline as the first tax course I took was as an extra  half course in 1982/83 and I do vaguely recall it re computations. 

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/manua...

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By nogammonsinanundoubledgame
03rd Feb 2016 12:56

A petition ...

... re loan interest on residential property would have more sympathy from me, but I suspect would be about as effective.

With kind regards

Clint Westwood

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RLI
By lionofludesch
03rd Feb 2016 13:05

Better off

You can be better off.

If the tax credit would've pushed you into the higher rate band.

It affects a small number of folk.

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RLI
By lionofludesch
03rd Feb 2016 13:28

Was it really ?

I had in mind that it was at the same time that they switched the tax burden from rich people to poor people by capping income tax at 40% and pretty much doubling VAT.

Anyway, it's a long time ago .....

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By Portia Nina Levin
03rd Feb 2016 13:40

Not all dividends are £32,000 (and £32,000 grossed up at 10/9ths is £35,556 incidentally), and not all taxpayers have nicely used their PA and have there whole BRB available.

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Replying to memyself-eye:
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By legerman
03rd Feb 2016 13:53

My example

Was based on taking the maximum amount of basic rate so that the full 10/9ths before tax credit was taxed at 32.5%  A lesser amount would mean less tax under the old system.  (Fair point about my figure, I multiplied quickly by 11%) 

Even if the full personal allowance wasn't taken I still fail to see how it would mean less tax paid, as the company (I'm thinking here small company) would incur a further £2200 in corporation tax.

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Replying to gainsborough:
RLI
By lionofludesch
04th Feb 2016 13:09

Any fool can .....

legerman wrote:

Was based on taking the maximum amount of basic rate so that the full 10/9ths before tax credit was taxed at 32.5%  A lesser amount would mean less tax under the old system.  (Fair point about my figure, I multiplied quickly by 11%) 

Even if the full personal allowance wasn't taken I still fail to see how it would mean less tax paid, as the company (I'm thinking here small company) would incur a further £2200 in corporation tax.

Yeah - you've just picked some numbers that support your point.  Unsurprisingly, they support your point.

The assertion was that it's impossible to be better off under the new system.   It's not.

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Replying to memyself-eye:
RLI
By lionofludesch
04th Feb 2016 13:06

Thank you

Portia Nina Levin wrote:
Not all dividends are £32,000 (and £32,000 grossed up at 10/9ths is £35,556 incidentally), and not all taxpayers have nicely used their PA and have there whole BRB available.

Thank you Portia.

Some dividends might be - say - less than £5000.  Who knows.

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By Ruddles
03rd Feb 2016 13:54

Lots of clients that are better off


We have a large number of clients currently paying higher and additional rates of tax on dividends totalling less than £5k. From April 16 they'll be paying no tax on those dividends.

There are also clients paying higher rate tax on dividends of circa £20k who will be marginally better off under the new rules. Try this one yourself - higher rate taxpayer with £10k dividend income. Better or worse off next year? (Assume total taxable income under £100k)

Of course, we also have plenty of clients who stand to lose out. But this thread is about the petition. What am I supposed to do - send one letter to clients telling them to sign, and another letter to a different block of clients advising them to send letters of support for the changes to the Treasury?

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By Portia Nina Levin
03rd Feb 2016 13:54

Incidentally, all that happens if the petition gets the requisite number of signatures is that it gets debated "in parliament".

That will take place in the form of a debate by a committee. Essentially some MPs get to perpetuate their own views on the matter, and nothing happens anyway.

Makes all the prols feel like something's being done though.

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Replying to fawltybasil2575:
By Duggimon
03rd Feb 2016 14:01

Not quite

Portia Nina Levin wrote:

Incidentally, all that happens if the petition gets the requisite number of signatures is that it gets debated "in parliament".

That will take place in the form of a debate by a committee. Essentially some MPs get to perpetuate their own views on the matter, and nothing happens anyway.

Makes all the prols feel like something's being done though.

 

It gets "considered" for debate in parliament.

"Do you fancy debating this?" "No"

Job done.

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By legerman
03rd Feb 2016 14:02

@ ruddles

I understand where you are coming from now, thanks.  For the people you mention there is an advantage under the new system.

I was thinking more in terms of the small company owner drawing a mix of small salary, large dividend, towards which this tax is squarely aimed at, and hadn't considered how it benifited those who receive dividends from shares invested elsewhere.

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Replying to New To Accountancy:
paddle steamer
By DJKL
03rd Feb 2016 14:32

Lot of perms

legerman wrote:

I understand where you are coming from now, thanks.  For the people you mention there is an advantage under the new system.

I was thinking more in terms of the small company owner drawing a mix of small salary, large dividend, towards which this tax is squarely aimed at, and hadn't considered how it benifited those who receive dividends from shares invested elsewhere.

There are also those of us who have most of our income via PAYE but operate our part time practice via a limited company; one of the reasons why I (we) am(are) currently not declaring dividends if  they can be avoided (cashflow permitting)  and have delayed some works on our house so that they can be paid for post A day without tripping a higher rate liability. There are no doubt a fair few perms where the changes are not negative if one's dividends are modest and the shares cannot be held in an ISA.

It also allows funds to be built up in one's company to be later used as a tax free pension substitute if I say decide to retire before being eligible for the state pension (2x £5,000 a year augment later replaced by state pensions coming on stream)

 

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