7.5% on dividend income within the basic rate band 32.5% on dividend income within the higher rate band 38.1% on dividend income within the additional rate band Dividends received on shares held in an Individual Savings Account (ISA) will continue to be tax free The finance Bill This legislation will modernise, reform and simplify dividend taxation. Only those with dividend income over £5000 per year, or those who are able to pay themselves dividends in place of wages, will pay more tax. The majority of non-taxpayers and basic rate taxpayers do not currently need to inform HM Revenue and Customs (HMRC) of their dividend income. From April 2016, individuals who receive dividends between £5,001 and £10,000, and who need to pay tax on those dividends at the basic rate, will have to inform HMRC of their dividend income for the first time. This number is estimated to be fewer than 8,500 customers. (Individuals with more than £10,000 of dividend income are already required to be in Self Assessment). Around 2 million individuals are expected to have some tax to pay on their dividend income after April 2016, compared to 1.8 million if these reforms had not been put in place. This tax will be collected automatically through PAYE in most cases, although further details will be published in good time ahead of any tax being due.
An interesting article from Accounting Web has highlighted the following:
“Under self assessment this additional tax would be payable by 31 January 2018, as the balancing payment for that tax year. However, HMRC doesn’t want to wait that long for the extra tax, so it has amended the tax codes of many owner/directors to “code out” an estimated amount, which is approximate to the dividend tax due for the year.”
Read the full article from Accounting Web .
CHAPS to extend its operating hours 4 March 2016
CHAPS, the same day payment system, will be extending its operating hours from Monday 20 June 2016.
From 20 June 2016, the Bank of England’s Real Time Gross Settlement system (RTGS), which processes CHAPS payments, will be staying open for an extra hour and 40 minutes, closing at 18:00 instead of 16:20. The new scheme deadline for customer-to-customer payments will be 17.40, and 18.00 for bank-to-bank payments. This gives the Direct and Indirect Participants the opportunity to extend their CHAPS service to their customers. However, only individual institutions are able to confirm the details of their service offering to their customers.
To help to inform CHAPS users of the change to the scheme’s operating hours CHAPS Co has produced and is disseminating to stakeholders information guides, with tailored versions for corporate and individual customers.
CHAPS would welcome you to use these guides, adapting or branding them as you wish, when communicating with your customers directly about the CHAPS service that they will receive from 20 June. Please note however that they are provided for general information purposes only and recipients should always seek their own independent professional advice.
Extending CHAPS' Operating Hours - Information Guide for Businesses and Consumers
Extending CHAPS' Operating Hours - Information Guide for the Financial Industry and Large Corporates
Tables A: Pay adjustment tables – error correction 4 March 2016
We published links to Tables A: Pay adjustment tables recently which contained errors on Weeks 32 and 51. These have now been corrected.
On 22 February we published links to HMRC employer guides for 2016-17 tax year. Tables A: Pay adjustment tables contained an error on Week 32 table (page 35) and Week 51 table (page 54). These errors have now been corrected.
CIPP Policy News Journal
25/04/2016, Page 304 of 453
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