Warning over tax changes

TaxAssist Accountants David Cramp and Stephanie Harding celebrate their move to larger offices in Queen Street, Mirfield.
TaxAssist Accountants David Cramp and Stephanie Harding celebrate their move to larger offices in Queen Street, Mirfield.

Business owners in Brighouse who rely on dividends to pay themselves need to prepare for a major tax change which could hit their take home pay, according to a local specialist.

David Cramp, of TaxAssist Accountants in Brighouse, said a change to dividend taxation announced in the budget would affect many small businesses.

He said: “The budget announcement was disguised as a new tax-free allowance of £5,000 for investors in companies. But many small businesses operate as limited companies and depend on the firm for their main source of income. But from next April, dividend income over £5,000 a year is liable for tax. This is a significant added cost and sole traders may reconsider operating as a limited company.”