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Budget 2017 delivers tax bombshell for investors

The sting in the tail for investors was Chancellor Hammond's cut in the dividend tax allowance - down to £2,000 annually from the previous £5,000. Paul Haywood-Schiefer, of accountants Blick Rothenberg calculated that this cut will mean a £225 increase in tax. For a higher rate tax payer, a higher tax bill to the tune of £975 will happen.

Mike Gordon, technical director at Rutherford Wilkinson, remarked that, ‘The reduction in the £5,000 tax-free dividend allowance to come into effect in April 2018 was a bit unexpected with the allowance only introduced in this tax year. For a higher rate tax payer, it would make up to £975 of difference in the amount of tax paid on dividends over the allowance. For a basic rate tax payer, it would be up to £225. These figures potentially double up where both husband and wife hold shares in the company. On other changes, it is understandable there should be no difference in tax paid between the self-employed and employed.

More details on this and comment on the Budget Speech here: Budget 2017: Starkly upbeat Hammond pushes GDP forecast up

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