Back door rise
The Association of Taxation Technicians labelled the new dividend scheme a tax rise “by the back door.”
“As this measure was announced by the Chancellor as being a tax-free allowance it is understandable that taxpayers believed the dividend allowance would operate outside of an individual’s tax rate bands,” Michael Steed, President of the ATT.
“To now discover that the allowance is in fact restricting the amount of dividends that a basic rate taxpayer can currently receive without a tax liability is a fairly big shock. It also raises questions as to the real policy intention behind this measure.
“The Chancellor announced the dividend allowance as a positive measure for taxpayers but underneath it all it now appears to be designed as a tax raising measure. Shareholders in family companies in particular may well feel that this is a tax increase by the back door,” he said
