IFS slams 5.91 plans
The Institute of Fiscal Studies has joined the growing number of opponents to government plans to clamp down on dividend payments from small incorporated companies.
The influential body has brought issue against controversial paragraph 5.91 from the pre-Budget report, saying it would be a ‘simpler solution’ to remove the tax free incentive for companies with less than £10,000 of profits.
‘Frequent changes to the tax system, particularly if made without prior consultation, do not lead to a stable environment for businesses making long-term investments,’ the Daily Telegraph reports the IFS saying.
Should the chancellor remove the two-year old incentive, however, it would similarly outrage small business owners who were urged to incorporate in order to take advantage of the zero-rate. Incorporated businesses are usually far simpler for the government to deal with.