Effective 06 April 2023 the tax free dividend threshold will be £1000.
Dividends above this level will be taxed at 8.75% (basic rate), 33.75% (higher rate), and 39.35% (additional rate).
The change will apply to all UK company shareholders who receive dividend income.
What steps can contractors take to minimise their tax liability?
Although dividend tax bills will marginally increase from April 2023, it does not significantly reduce the financial advantages that contractors currently enjoy.
It is however prudent for contractors to consider how they could limit any future liabilities. Options may include:
- Retain cash within the business to fund company pension contributions
- Retain cash within the business to fund company life cover (i.e. critical illness) premiums
- Retain cash within the business until retirement
- Employing staff within the business
Champion have relationships with various Independent Financial Advisors (IFA’s) who can provide bespoke guidance on pension and investment opportunities. An introductory call or face/face meeting can be organised on request.
For more general facts, figures and options, please call 0161 703 2549.
Contact Us
For more information and advice simply request a call back or contact one of our advisors on 0161 703 2549. Alternatively please email us on info@championcontractors.co.uk.