The Government will also increase the rates of dividend tax, which are payable on dividend earnings of above £2,000/yr. See the table below for the full details. It also excludes the dividend income earned from investments held in ISA’s
Increase by 1.25%
| Basic rate taxpayers Up to £50270 | Higher rate taxpayers Up to £50271 – £150000 | Additional rate taxpayers Over £150000 | |
|---|---|---|---|
| Dividend rates for 2021/22 Current tax year | 7.5% | 32.5% | 38.1% |
| Dividend tax rates from 2022/23 |
8.75% | 33.75% | 39.35% |
| NIC | 2021/22 Current NIC threshold |
Current NIC rate |
2022/23 NIC rates |
2023/24 NIC Rates and H&SC Levy |
|---|---|---|---|---|
| Main rate/higher rate* |
Main rate/higher rate* |
Main rate/higher rate* |
Main rate/higher rate* |
|
| Employees (Class 1) |
£9,568 | 12%/2% | 13.25%/3.25% | 12%/2% and 1.25(H&SC) |
| Employees (Class 1) |
£8,840 | 13.8% | 15.05% | 13.8% and 1.25% (H&SC) |
| Employees (Class 4) |
£9,568 | 9%/2% | 10.25%/3.25% | 9%/2% and 1.25% (H&SC) |
*For 2021/22 the main rate is for earning between £9,568 and £50,270. The higher rate applies for earnings above £50,270.
Quite a hit
Look at your pricing:
-You have to react
-Affected taxpayers in the SME and family business may wish to bring forward bonus and dividend payments ahead of the changes in the NIC and tax rates i.e. before 06th April 2022
-How can you add value to the customer or the product
-If the business has small margin they need to consider increasing the price.
-The solutions are different for each business
