2019/20 Rates Update

Now the new tax year has started the new tax rates and thresholds are in place, as well as new national minimum wage rates and new rates for statutory payments. Pension contributions have also increased from April.

The tax rates are now different between Scotland and England, for the purposes of this blog we are talking about England and Northern Ireland and Wales.

Changes to tax on Dividends

For small business owners dividends have traditionally been seen as the  preferable way to take money out of a business. This was because the tax rates on dividends were lower than if the money had been taken as salary. From April 2018 the rules have changed making this method less attractive as the government aimed to reduce the tax difference between the self-employed and those working through a company, although with careful planning it can still be the more tax effective option.