The Chancellor confirmed in the Autumn Statement the following rates of income tax on dividend income which will remain through 2022/23 and into the 2023/24 year as well:
- ordinary rate 8.75%
- upper rate 33.75%
- additional rate 39.35%
The dividend allowance - the amount of dividend income a UK tax resident individual can receive tax-free in a tax year - will reduce from £2,000 currently to £1,000 from 6 April 2023, and only £500 from 6 April 2024.
The rate of tax payable on overdrawn directors' loan accounts ("section 455 tax") will remain at 33.75%, in line with the upper rate of tax on dividend income.
The above rates and thresholds apply throughout the UK.
Contact us to discuss how this announcement affects you and your business.