New dividend tax is anti-business, claims Bishop Fleming

New dividend tax is anti-business, claims Bishop Fleming

New dividend tax is an attack on small business owners and is acting against the best interests of the UK economy, warns Top 50 accountants, Bishop Fleming

A NEW dividend tax introduced in April 2016 is an attack on small business owners and is acting against the best interests of the UK economy, warns Top 50 accountants, Bishop Fleming.

Since April, any business owner wanting to take a dividend out of the taxable profits they generate in their own company faces a tax charge ranging from 7.5% to 38.1%, depending on their other income. The worst hit are people running small businesses who have suffered proportionally the largest increase, at a time when the economy should be encouraging them.

In addition, an unintended consequence of this new burden is that wealthier business owners are now leaving substantial amounts of money in their companies, to avoid paying even more tax on money that has already been taxed. This means less money is circulating in the UK economy to help boost consumer-led growth.

Bishop Fleming’s head of tax, Andrew Browne [pictured], said: “The new dividend tax creates a double whammy for the UK; it penalises the very people we should be encouraging to start and grow successful businesses, and removes money from the economy that would otherwise help to support growth.”

Browne questioned the government’s strategy: “Business owners will be asking themselves why they should be putting in the extra hours and taking the risks if they are going to be further penalised. This is surely anti-business.”

The Bishop Fleming partner said: “I would urge the new chancellor in his Autumn Statement to re-think this tax and send out a positive message to SMEs that their efforts are appreciated in boosting the UK’s enterprise culture. A cut in the tax would be really welcome to reward hard work and boost consumer demand.”

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

2y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

2y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

2y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

2y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource