Is the new UK tax laws going to make income tax and dividend tax the same?
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I seem to remember if I used my personal allowance and then had the rest in dividends my tax would be significantly decreased (up to £30,000~) because there was no tax on dividends below £30,000~? Is dividend tax now the same as income tax? Cheers
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Answer:
Didividends have three rates of tax. That is 10% basic, 32.5% higher and 42.5% additional (has this been phased out with the 50% tax rate?). The basic rate goes up to £35000. Most dividends come with a 10% tax credit so if your total income is less than £35000 there will be no more tax to pay. If your total income is above £35000 you will pay an extra 22.5% (32.5% less the 10% tax credit).
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Other answers
No it is not, they are submitted as distinct types of income and you should keep HMRC informed of your dividend income. The tax rates are different and dividends are paid with a notional dividend tax credit included.
Petrusclavus
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