Brokers have described Boris Johnson’s plans to raise taxes on company dividend payments as a “kick in the teeth” to savers and shareholders.
The prime minister said on Tuesday that a 1.25 percentage point increase in taxes on listed companies’ regular payouts was needed to help fund spending on health and social care services. The government said the move would raise an additional £600m a year.
But investment groups, taken aback by the unexpected increase, said it would be painful for those who rely on regular dividend payments for their income, particularly after companies crimped their payouts when the Covid outbreak hit markets in 2020.