The rules for taxing dividends changed radically from 6 April 2016 with the removal of the 10% notional tax credit and the introduction of new rates of tax on dividends. For many taxpayers that meant more tax to pay on those dividends on 31 January 2018. The same will also apply on 31 January 2019.
If you received £30,000 of dividends in 2017/18 which are subject to higher rate tax, there is a £5000 dividends allowance and the remaining £25,000 of those dividends would be taxed at 32.5% meaning £8,125 due on 31 January 2019.
This highlights the benefit of preparing personal tax returns as soon as possible, so that you know how much tax you need to pay next January and can set aside sufficient funds.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please book a discussion