I was honoured to appear in the Tax Journal ‘One Minute With…” feature in Jan 2021 – please see article below
I was really thrilled to win the ‘Tax Writer of the Year’ award at this year’s Taxation Awards, which was held at the Hilton On Park Lane in London.
It was a great night as my dear friend – Robert Jamieson – also picked up the Lifetime Achievement Award.
Thank you to everyone involved…
We were very honoured and excited to sponsor the ‘Best Individual Performance Of The Season’ award at the 2016/17 West Ham United Player Awards evening.
It was great to see the winner this year was James Collins (aka ‘Ginger Pele) for his defiant defensive display against Swansea City which gave ‘us’ a much needed three points and a clean sheet.
It was a fantastic night and our hosts, Tony Cottee and Bianca Westwood, proved an entertaining partnership. We loved the expanse and setting of the Intercontinental Hotel at the O2.
Our guests loved mingling with the players and they enjoyed their ‘photo shoot’ with the first team squad.
Definitely a night to remember…
This year, we suddenly lost Dave Cartwright, who was probably one of our most under-rated folk songwriters and performers. And it was most fitting that his admirers and fans organised an evening to celebrate his 50 years in music and performing at The Conquest Theatre in Bromyard (Herefordshire).
We were proud to have sponsored his memorial concert which included a host of musicians, songwriters and poets, including Richard Digance, Harvey Andrews, Bev Pegg, Hennesea , Roy Smith, and John Montague.
The concert raised £1,900 amount for Dave’s Family’s chosen charity ‘Songbird Survival’.
Tax pundits have been telling us for many years that income tax on dividends would increase. That moment finally arrived in the Summer Budget 2015 but we never thought it would be like this.
Our beloved imputation system – designed to prevent double taxation of corporate profits – will be consigned to the fiscal dustbin on 6 April 2016. The Treasury points out that this regime was “designed more than 40 years ago when corporation tax was 50 per cent and the total bill on dividends for some was over 80 per cent”. Similarly, the (non-reclaimable) 10% tax credit that has been carried with dividends since April 1999 will be scrapped.
In its place, Chancellor George Osborne unveiled a progressive series of dividend tax rates that will ‘kick-in’ from 2016/17. However, dividend income will benefit from a new £5,000 tax-free allowance. Taxable dividend income in 2016/17 will be taxed at the special tax rates shown in the table below
|Dividend tax rates – 2016/17|
|Taxable dividend income*||Tax rate**||Comparable rate in 2015/16|
|Up to £32,000||7.5%||Nil|
|Between £32,000 and £150,000||32.5%||25.0%|
|* Total dividend income after £5,000 exemption and any available personal allowance|
|** Rate applies to actual dividend received with no grossing-up|
From 2016/17, the new dividend tax regime brings in much higher tax rates. A review of the total tax costs (including corporation tax) of paying dividends out of a typical owner-managed company is provided below:
Owner-managers will look at this table with some dismay – these are significant increases. For many years now, most owner managers have pursued a ‘low salary/high dividend’ profit extraction model since this proved to be more tax efficient. Dividends were taxed at lower rates than earnings and they did not attract (Class 1) national insurance contributions (NICs).
Companies that exploit the ability to pay ‘tax-free’ dividends of around £35,000 to spouses will now see such amounts taxed at 7.5% from 2016/17. This should still produce typical tax savings of 25% (i.e. 32.5% less 7.5%) of the dividend and hence such planning will still be worthwhile.
The 2016/17 increases in dividend tax will narrow the tax differential between bonuses and dividends, so that dividends become only marginally preferred – see example of ‘bonus v dividend’ comparison below:
Many owner managers are likely to consider accelerating dividend payments before April 2016 to benefit from the current lower rates. Provided ‘their’ companies have sufficient distributable profits, additional dividends can be paid out. If the company still needs the cash for working capital or future investment, it can be ‘invested’ back in the company as a director’s loan. Bringing forward dividends to the current tax year means advancing the tax due on the dividend but this disadvantage will be outweighed by the tax savings.
Some owner managers will now seek to retain more profits within the company at low rates of corporation tax (which should reduce to 18% by 2020). There may also be a tendency to take out these reserves on ‘retirement’ via a ‘capital’ company purchase of own shares transaction.
It appears, HMRC has no plans to increase the 25% ‘section 455’ tax charge on loans to participators. This is bound to encourage more owner managers to ‘live’ off overdrawn loan accounts at a reasonably palatable tax rates (especially with the beneficial loan charge currently based on an interest rate of 3.25%).
The hike in dividend tax rates is expected to swell the Treasury’s coffers by some £2 billion a year and is one of the biggest revenue raisers in the Summer Budget. However, the Treasury may have underestimated the behavioral response of owner managers and the predicted tax take may well fall short of that figure – due to the ‘laffer-curve’ effect, but that is a discussion for another day.
We had a fantastic time as guests of West Ham Chairmen – David Gold and David Sullivan – for the tasty ‘West Ham v Arsenal’ fixture at Upton Park.
And what a game it was – I can do no better than ‘paste’ Sky’s Phil Thompson’s verdict here.
“For the neutral this was absolutely stunning, it was a magnificent game. It was a second game in three days, with both sides giving everything. I didn’t want the game to end, it was that good. Szczesny deserves great compliments because he has made a big decision that anything in the air he is going to come and get and control the air in the penalty area. He had to be precise.”
Perhaps the only thing I should add is that West Ham were very unfortunate not to pick up at least a point from this game, where they had a superb Alex Song goal disallowed for a very dubious ‘offside – interfering with play’ decision – no ‘offside’ Hammers player touched the ball! Anyway, I was very proud of the lads fight back in the second half.
We loved talking to some of the celebrities in the lounge – as shown below:
Thank you to David Gold for looking after us..
It is now becoming a firm tradition to invite our professional contacts and friends to our Ronnie Scotts Christmas Lunch.
Ronnie Scotts lay on a great feast of food and musical entertainment, including the Annual Kazoo Competition. Unfortunately, I am still yet to make the last three in the ‘Kazoo’ challenge final, but as I keep saying it is the participation that counts.
Ronnie Scott’s legend – Alex Garnett just gets better and better!
Here are some photos of our guests enjoying themselves…
Congratulations to my publisher – Bloomsbury Professional – on reaching a landmark 10th birthday. I love working with the team at Bloomsbury – so friendly and accessible – here’s to the next ten years.
And thanks for the lovely write-up on my book…click link below