Chancellor’s dividend arrangements add weight to contractors’ objections
Those who are railing against the imminent introduction of the new dividend tax rates have been provided with an additional weapon for their attack on the changes, and its one which George Osborne will find hard to counter.
While some of the Chancellor’s critics have made it clear that they think nobody who had ever run a business would have introduced the new rates, it has come to light that George Osborne himself has recently received a dividend payment of £1,200 from his family business. Mr Osborne owns 6,833 shares of his family business, which is less than 1 per cent of the total available in the Osborne and Little Group, and he received 18 pence a share for these last year, according to the Sunday Times.
It also transpires that the Osborne and Little Group have paid absolutely nothing in corporation tax over the last seven years according to the newspaper’s analysis of the financial records of the company.
This has been put down to the fact that the group rolled over losses from previous years in order to defer tax payments, but it doesn’t exactly present the Chancellor’s personal financial dealings in the best light, especially in light of the upcoming dividend tax hike. Having described those who use legitimate means to avoid tax due as ‘morally repugnant’, he may find it hard to defend his position as a shareholder of a business which could be said to be doing just that.
Whilst the Chancellor’s office are keen to reassure the public that all Mr Osborne’s interests and business affairs have been properly declared according to all the relevant rules, there is still an overwhelming sense of ‘do as I say, not as I do’ about the revelations.
Those who are opposed to the introduction of the new dividend tax will have noted that the Chancellor’s dividend income is not enough to push him into the lowest taxation bracket though, meaning that he will still be at least one step removed from the impact of the changes.
If you don’t know whether you are receiving a salary or dividends from your company, then our guide to operating a limited company will help you to understand the ways in which you can arrange your finances. We also have a take-home pay calculator which you can use to understand your options and our guide to contractor tax which contains plenty of information which will come in handy if you want to understand more about your finances.
If you are concerned about the changes to the way dividends are taxed then getting advice from a specialist is the best way to ensure that you aren’t paying more than you need to. To speak to one of our expert accountants, call us today on 01442 275789 or email firstname.lastname@example.org.