Dragons’ Den winner backs petition urging Osborne to reconsider dividend tax changes
Almost 50,000 small business owners have signed petition against government's plans to increase dividend tax by 7.5% from April 6 2016
The founders of Dragons’ Den success story Magic Whiteboard are among almost 50,000 UK small business owners to have backed a petition calling on George Osborne to reconsider increasing small business dividend tax by 7.5%.
The changes, set to be introduced on April 6 2016, will see dividend tax increase from the existing 25% to 32.5% – a hike which Magic Whiteboard says is unfair and will hurt millions of small businesses, directors, shareholders and employers:
“The economy is still very fragile and many companies will struggle to make a profit with all these additional costs, it could cause the economy to go into recession. Customers are not accepting any price increases so these costs can not to transferred to customers. This means that small businesses have to pay them.”
The petition – which needs 100,000 signatories to be considered for debate in Parliament – is arguing for government to reduce the planned increase from 7.5% to 3% as “this would be fairer to small businesses”.
HM Treasury has responded to the petition:
“The government is committed to supporting entrepreneurs and a fair tax system. Dividend tax reform allows further cuts in Corporation Tax and reduces the incentives for tax motivated incorporations.
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“The government is reforming dividend taxation. These reforms, which will also simplify the dividend tax system, will significantly reduce the incentives for people to set up a company and pay themselves through dividends rather than wages simply to reduce their tax bill. Taxpayers and the exchequer will now be £500m better off as result of reduced incentives for tax motivated incorporation.”
The Reconsider the new Dividend Tax for Small Businesses petition currently has over 49,000 signatories, view the petition here.