Currently, £1,000 can be taken as tax free dividend income in the current tax year 2023-24.
It was £2,000 prior to that. However, come 6 April, the £1,000 is cut again and the tax-free amount will be £500 only. This is estimated to affect nearly £4.5m people and raise significant sums for the treasury.
HMRC are taking an interest in companies now and comparing profits and movements in reserves, which might indicate dividends and writing to business owners offering an option to disclose on any dividends not declared. These letters require a response within 30 days.
If you need any help or wish to discuss any aspects of dividends further, please contact us.
