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The 'so-called dividend tax' was launched as a beneficial tax allowance in the Spring Budget. The intention was that the previous dividend regime would be replaced with a tax free £5,000 dividend allowance. However, when detailed information was released it was clear that it will sit inside the tax bands - causing one professional body 'to dub it a tax rise by the back door'.
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Now entrepreneur, Frauke Golding, has started an online petition against the measure. Protocol is such that at 10,000 signatures, the Government will respond; and at 100,000 signatures, the motion will be considered for debate in Parliament.
The petition says:
"The Government want to stop business owners being paid via dividends to reduce tax bills. This flies in the face of risk and reward for running a business and contributing to the economy. Life as a business owner means very long hours, low pay, stress, no holiday or sick pay and a life of uncertainty and worry.
"The Government have stated that business is going to be at the heart of their programme for the next five years. Small businesses make up 99.3 per cent of all private sector businesses and we provide just under 50 per cent of all private sector jobs. There is a real danger that this new tax, along with auto enrolment and minimum wages increases, will have a significant effect on those people brave enough to start up a business that could make a meaningful contribution to the economy and jobs market."
The petition currently has around 5,000 signatures.
Details of the petition are on the Parliamentary website here:Reconsider the new Dividend Tax for small businesses.
For more information, see Shout99's articles:
New dividend allowance is tax rise ‘by the back door’ - Aug 2015
HMRC's factsheet on new dividend treatments - Aug 2015
Summer Budget 2015 (4): Attack on contractors' dividends - July 2015
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Susie Hughes © Shout99 2015
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