How the Dividend Tax Reform Could Benefit You?

Transcription

1 All Basic rate.. 54,700 24,400 1,880 81,000 Higher rate... 30,800 12,900 43,800 Additional rate ,400 25,400 Starting rate Basic rate ,060 Higher rate ,010 Additional rate Ordinary rate , ,700 Higher rate... 4,070 1,050 5,120 Additional rate.... 3,870 3,870 Allowances given as tax reductions ,430 2, ,200 61,400 46, ,000 Average Rate of Tax % Average amount of tax 206 1,440 2,250 14, ,000 5,410

2 (8) All Basic rate.. 54,700 25,000 1,980 81,700 Higher rate... 31,600 13,500 45,200 Additional rate ,000 25,000 Starting rate Basic rate Higher rate Additional rate Ordinary rate , ,840 Higher rate... 4,460 1,270 5,730 Additional rate.... 3,610 3,610 Allowances given as tax reductions ,400 1, ,000 63,400 46, ,000 Average Rate of Tax % Average amount of tax 206 1,330 2,250 14, ,000 5,460

3 (8) All Basic rate.. 54,400 25,700 2,080 82,100 Higher rate... 32,600 14,100 46,700 Additional rate ,000 26,000 Starting rate Basic rate Higher rate Additional rate Ordinary rate , ,940 Higher rate... 5,560 1,490 7,050 Additional rate.... 5,720 5,720 Allowances given as tax reductions ,430 1, ,400 66,200 50, ,000 Average Rate of Tax % Average amount of tax. 1,140 2,250 14, ,000 5,710

4 (8) All Basic rate.. 55,300 26,200 2,070 83,600 Higher rate... 34,100 14,700 48,800 Additional rate ,500 27,500 Starting rate Basic rate Higher rate Additional rate Tax on dividends (after personal dividend allowance) (7): Ordinary rate ,460 Higher rate... 3, ,220 Additional rate.... 2,070 2,070 Allowances given as tax reductions ,440 1, ,800 65,000 47, ,000 Average Rate of Tax % Average amount of tax. 1,060 2,260 14, ,000 5,610 Source: Survey of Personal Incomes. Table updated May 2016

5 Key - negligible. not applicable / zero Footnotes for table 2.6 (1) Taxpayers with no taxable earnings and total taxable income from savings below the starting rate limit. From the starting rate of tax for savings income has been reduced from 10% to 0%, and the starting rate limit has been increased to 5,000. (2) Before with no taxable earnings and total taxable income from savings between the starting rate limit and the basic rate limit and/or dividends at the 10p ordinary rate. From with no taxable earnings and total taxable income from savings charged at the 20p rate and/or dividends at the 7.5p rate. (3) Taxpayers whose income includes earnings or other income taxed as earnings and with total taxable income below the basic rate limit. (4) Taxpayers with total taxable income between the basic rate limit and the higher rate limit. (5) Taxpayers with total taxable income above the higher rate limit. (6) In this context tax reductions refer to allowances given at a fixed rate, for example the Married Couples Allowance. (7) Prior to , total income includes the amount of dividends plus dividend tax credit (one ninth of the dividend), the grossed dividend, and income tax is charged on the grossed dividend. The tax due can be satisfied (in part) by the notional tax credit (10% of the grossed dividend). The table reflects the grossed dividend in total income and shows the income tax liability before the tax credit is offset. From the dividend tax credit is abolished, effective dividend tax rates are increased by 7.5% and a 5,000 Personal Dividend Allowance is introduced. This affects the measure of total income, income range and marginal rate band, and leads to a discontinuity in the basis on which tax liabilities are presented between (and earlier) and , so the share of incomes and tax liabilities are not directly comparable. For this reason comparing dividend tax liabilities between and is not a reliable indication of the impact of the dividend tax reform. (8) Projected estimates based upon the Survey of Personal Incomes using economic assumptions consistent with the OBR s March 2016 economic and fiscal outlook. The following is a link to the income tax liabilities national statistics homepage, which includes a bulletin providing a detailed analysis of income taxpayer numbers and tax liabilities: We strive to improve the quality and accessibility of our National Statistics and Bulletin, your feedback is crucial in this process. We welcome your suggestions on any of the Statistics and Bulletin in this Income Tax Liabilities publication: Feedback