Family businesses pay higher dividends to avoid tax rate

Family businesses are considering doubling their normal dividend to offset the Government’s tax hike on high income earners.

The government’s controversial 50% tax increase for those earning more than £150,000 on April 5, could be countered by family companies in a move which would allow family members to limit their tax liability, The Telegraph reports.

Mary Monfries, head of UK private business at PricewaterhouseCoopers, said she has had a couple of clients “seriously thinking” about how to plan their finances over the next few years.

“I have had a couple [of clients] seriously thinking 'What do I need funding-wise over the coming few years? If I take it out before April it will cost me less than if I did it afterwards'," she said.

Read the full story: Companies plan bumper dividends to beat income tax rise