Responding to the Government’s announcement on their plans to introduce a new health and social care tax, based on an increase to National Insurance and the tax on dividends, Kitty Ussher, the Chief Economist at the Institute of Directors, has said:
“This is an extraordinary time to be adding additional burden to business and the cost of employing staff, just as it looks to recover from the pandemic. It smacks of political opportunism, exploiting public sentiment at the expense of some of the most productive and entrepreneurial segments of the economy.
“The surprise new tax on dividends will yet again target small company directors. Incorporated sole traders and other owner-managers, who relied on dividend income, were the only group of workers that were not supported by government during the pandemic. Employees and the self-employed were provided with financial support to tide them over, but this group was not. While it may make sense in the long-term to align tax rates for all types of income, this government has shown through its actions a total lack of understanding to the very real difficulties faced by owners of the smallest businesses in Britain.”