Have you remembered this?

There is now a 7.5% tax charge on net dividend income over £5,000. The first £5,000 will be exempt, but thereafter the new charge will apply. From 5th April 2018 this limit now falls to £2,000. In January 2018, many taxpayers, whose main source of income has been from dividends, will find that there is a tax liability on income from which previously there was no tax liability unless they were higher rate tax payers.


A taxpayer in 2015/16 with a basic salary of £8,060 and gross dividend income of £34,325 would not have had an additional personal tax liability as their total income was covered by personal allowances and the basic rate tax band.

In 2016/17 using the same income the personal tax due for 2016/17 will be £1,978.00 and in addition as the liability is more than £1,000 there will also be payments on account to make for 2017/18. On 31st January 2018, the tax to pay personally will be £2,967 and as a couple using the same income figures this will be £5,934, This additional tax will have a significant impact for many taxpayers on income from which there was previously no personal tax due. There will then be the second payment on account due on 31st July 2018 which will be £989 (or £1,978 if a couple).


Ensuring tax return information is supplied as soon as possible after 6th April 2017 will allow tax liabilities to be calculated at an early date for January 2018.