Budget 25: Dividend tax rates to rise by 2 percentage points

Basic rate taxpayers will see their levy rise from 8.75% to 10.75% and the higher rate will increase from 33.75% to 35.75%. The Office for Budget Responsibility has estimated that the rise in rates will yield, on average, £1.2bn a year from the 2027/28 financial year. "This includes the behavioural impact of individuals reducing their taxable dividend income in response to the measure, which is more than offset by a reduced incentive to incorporate in order to reduce tax liabilities," the OBR said. There will also be a "forestalling effect" from taxpayers projected to bring forward...