From 6 April 2016 the taxation of dividends received by individuals will change.
The 10% notional tax credit will be removed so that the amount received from a company will be the gross dividend for income tax purposes.
Furthermore, the rates of income tax applied to dividends will change. The first £5,000 of dividends received by an individual will be taxed at 0%. Thereafter, for basic rate taxpayers the rate of tax will be 7.5%, with a rate of 32.5% for higher rate taxpayers, and a rate of 38.1% for additional rate taxpayers.
This means that for many OMBs tax liabilities on dividends and other distributions from companies will increase. Companies should consider accelerating the payment of dividends in the current tax year, albeit that this means paying income tax earlier.