29 January 2016 09:00
Campaign launches in protest at new dividend tax
Thousands of small businesses have signed a petition against the proposed new dividend tax in a bid to force the Government to debate the issue.
The campaign has been launched by Serena Humphrey, a chartered management accountant and founder of finance training company The F Word based in Nottingham.
Humphrey is calling on chancellor George Osborne to reconsider his plans for a new Dividend Allowance that will replace the Dividend Tax Credit from April this year.
The chancellor unveiled the changes during last year's Summer Budget. Under the new rules, everyone will receive a £5,000 tax-free allowance - anything above this and basic rate taxpayers will pay 7.5% on their dividend income. Higher-rate taxpayers will pay 32.5% and top-rate taxpayers will pay 38.1%.
Under the current system, basic-rate taxpayers do not have to pay any tax on their dividends. Higher-rate taxpayers pay 25% and for those paying the top rate, it is 30.56%.
Serena Humphrey and fellow campaigners have collected more than 40,000 signatures but the petition must reach 100,000 by February 24 before the issue can be debated in Parliament.
"We want the Government to reconsider the dividend tax. I think they underestimate the impact it will have on people - it's a kick in the teeth."
The petition is part of Humphrey's recently launched Survive and Succeed campaign, which aims to raise awareness of and improve business survival rates. Humphrey added:
"Most people have no idea that so few businesses survive beyond five years. Nationally, 60% of companies fail before their fifth birthday."