{"id":1376,"date":"2021-09-30T00:00:00","date_gmt":"2021-09-30T00:00:00","guid":{"rendered":"https:\/\/slacc.co.uk\/index.php\/dividend-tax-increase-2022\/"},"modified":"2021-09-30T00:00:00","modified_gmt":"2021-09-30T00:00:00","slug":"dividend-tax-increase-2022","status":"publish","type":"post","link":"https:\/\/slacc.co.uk\/index.php\/dividend-tax-increase-2022\/","title":{"rendered":"Dividend tax increase 2022"},"content":{"rendered":"<p>As well as increasing National Insurance contributions from April 2022 &ndash; the 1.25% increase announced earlier this month &ndash; the Treasury also increased the hybrid income tax rates applied to dividends received, by the same amount and from the same date.<\/p>\n<p>The changes from April 2022 are:<\/p>\n<ul>\n<li>The first &pound;2,000 of dividends received are free of any additional tax charge, no change here.<\/li>\n<li>If you are a basic rate tax payer, your dividend income in excess of &pound;2,000 will be taxed at 8.75% (presently 7.5%).<\/li>\n<li>If you are a higher rate tax payer, any dividend income that falls into the higher rate band will be taxed at 33.75% (presently 32.5%).<\/li>\n<li>If you are an additional rate tax payer, any dividend income that falls into the additional rate band will be taxed at 39.35% (presently 38.1%).<\/li>\n<\/ul>\n<p>These increases are unlikely to influence the present planning options available to director\/shareholders of smaller companies that have adopted the high dividend, low salary approach to reduce exposure to NIC charges.<\/p>\n<p>However, after tax income from dividends will reduce.<\/p>\n<p>Other share owners who have their funds in tax-exempt wrappers, ISAs for example, will be unaffected by these changes.<\/p>\n<p>Investors who have fairly significant portfolios outside tax exempt investments may suffer tax increases on these income sources.<\/p>\n<p>With average dividend yields running at approximately 3.5%, you would need to have a portfolio in excess of &pound;57,000 to breach the &pound;2,000 tax-free limit.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>As well as increasing National Insurance contributions from April 2022 &ndash; the 1.25% increase announced earlier this month &ndash; the Treasury also increased the hybrid income tax rates applied to dividends received, by the same amount and from the same date. The changes from April 2022 are: The first &pound;2,000 of dividends received are free [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-1376","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=1376"}],"version-history":[{"count":0,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1376\/revisions"}],"wp:attachment":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=1376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=1376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=1376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}