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Dividend tax cut



A couple of weeks ago the previous Chancellor announced that the dividends tax rates are being reversed and will remain at the same rate in 2023-24. However, on 17 November the new Chancellor Jeremy Hunt announced that there would be some changes to the dividend allowance from April 2023. This change will see the dividend allowance going from £2,000 to £1,000. There will be further changes from April 2024, which will see the allowance set at £500.


What is dividend allowance?


Dividends are when profits are taken out of a company. The dividend allowance allows taxpayers a dividends allowance of £2,000 without it being taxable.


2023-24

Amount taxable

Dividend allowance

£1,000

Basic rate band

8.75%

£87.50

Higher rate band

33.5%

£337.50

Additional rate band

39.35%

£393.50


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