The system of taxing dividends on shares will change with effect from 6 April and, depending on individual circumstances, it could make sense for business owners either to accelerate payments so that they are received in the current tax year or to delay them so that they are received in the next.
Under the new system, the first £5,000 of dividend income will be tax free. Basic rate taxpayers will pay tax at 7.5% on any excess over £5,000; higher rate (40%) taxpayers at 32.5%; and additional rate (45%) taxpayers at 38.1%.
