I saved all my money since I was young, and employed it to make it work for me.
If you donāt want to do this then perhaps you should pay more tax because you were lazy with your money. I wasnāt lazy.
My dividends pay my pension, because the government isnāt paying much considering all the NI contributions I paid in over the decades in tax.
However, if the 1.25% goes directly to fund the NHS, then I am happy to pay. I hope it does.
Surely you donāt keep your pension in a GIA?
If it is in a SIPP or ISA there shouldnāt be a change in status - youāll pay no tax on dividends.
Indeed. I have it stashed equities in a few tax sheltered vessels, and also I let out a room in my house (so some in property), but some is not in ISA or SIPP. Itās all over the shop and I keep a list of the places that I send to important relatives in case I cop it one day 
( off topic I should like FT to provide guidance on beneficiaries to my FT account and provide a way to transfer my shares to the named beneficiaries a after probate. I know itās been mentioned afore, but noting it here for more visability)
Assuming a reasonably health 5% yield on dividends youād have Ā£400,000 in total assets.
We need to be careful not to confuse assets and income. If youāre paying an extra Ā£250 when youāre sitting on Ā£400,000 + SIPP + ISA you can consider yourself lucky.
This tax was aimed had company directors who pay them selves Ā£12k a year salary then draw dividends at a far cheaper tax rate than the income tax due if they paid it all as salary. Exactly as @kenny put it.
Taxing dividends / Capital gains lower than income can be seen as punitive against those who work for their money rather than whoās money works for them.
Iām not lazy with my money, I doubt anyone on here is. The fact that someone is on this forum means they are more interested in making their money work for them than 99% of the population
I do make over the Ā£2K threshold in dividends, but most are in my ISA so I donāt actually pay tax on them.
If you are making Ā£20K + from dividend paying stocks you are already rich and Ā£250 per year is nothing
If you are a director paying your salary in dividend thatās a tax dodge anyway and Iāve still no sympathy, also if you are doing that you are dodging the NI rise.
This makes more sense. The company div route takes taxes away from everyone else.
Saying this other countries take different paths, and I shall use Belgium as an example:
All dividends are taxes at 30% regardless, except for a minimum amount of ā¬800 pa tax free allowance.
However there is no CGT on nearly anything including equity, property sales.
But the top income tax rate is nearly 55% and started from ā¬36,000 .PAYE
I think this encourages growth investments, and dissuade companies paying themselves from dividends.
I prefer my tax free Ā£12,500 dividends allowance over here because I favour value dividend companies over capital growth.
Well, thatās one way of looking at it, and probably the way socialist governments would tend to lean. But the main reason, in theory, for having lower taxes on dividends is that it encourages people to invest in other companies, so that the economy overall has good availability of money.
The reason for not taxing company directors etc who take dividends in preference to income is to reward them for the risks involved in creating a company, which would hopefully also benefit the wider economy, and possibly creating jobs for other people too.
The reason governments have clamped down on IR35 is that contractors were exploiting a loophole, and they wouldnāt provide any of the benefits to society that companies do, most contractors only operated as a company primarily to reduce the amount of taxes paid.
If you are making 20k in dividends on top of the 20k deposits a year allowance of an ISA you must be seriously minted 
Iād say the 1.25% is overly generous with Sipp and ISA allowances plus standard taken into account.
Looks like this is having a knock on affect to UK share prices all mine are on the way down!
Correlation does not imply causation.
Snap itās great eh but also the S n p etc are all down as well, said to be due to China issues, gaming and others.
The Dow is up but everywhere else is down.
Itās always interesting to see this generic opinion on the way directors pay themselves and state itās a tax dodge.
I base things on experience and ultimately putting the shoe on the other foot to understand.
Iām a company director, and whilst many of my employees could clam furlough as Iām sure many people on this forum did, I couldnāt. You take all the risk at running a business and get little reward at times. Why would you not take advantage of any simple tax reduction if you could? We all do this on our FT ISA, thatās a tax dodge as well isnāt it!? 
I know many company owners who have just sold up or stopped trading these past 18 months as it really isnāt worth the hassle at times so slight tax reductions (dodge) just about makes things worth while.
Iād also argue that the tax created by the 50 people employed in the company gives more than my reduction in tax ever would.
So whilst Iām more than happy to pay more for good reasons, Iāve just been hit with a 3% increase yesterday and my only crime is keeping a company running through what was a nightmare of a year. Great! 
Just my two pence 
I think thereās an important distinction between complaining about the system vs an individualās actions. I think dividends should be taxed the same as income (after fixing for corporation tax) but I donāt blame anyone for taking advantage of it, I know I would.
Same as Amazon, I donāt expect them to voluntarily pay more than they need to, but I still think there could be changes to the system.
But you donāt have to pay yourself through dividends as a company director. It has historically been more tax efficient but the current Govt has made it pretty clear (through this measure and lack of support for the self employed non-PAYE) that they want to narrow the gap between forms of labour taxation.
I canāt say I blame them (and I say that as a director of 2 companies).
The idea that someone mentioned of directors being allowed to pay less tax because they take greater risk has always struck me as a pretty false idea - that is why we have limited companies to separate the risk of company failure from personal wealth. Whether a self employed director generates more wealth than a director paid through PAYE is surely more relevant a question (that Iāve not seen answered).
We all know the tax avoidance vs tax evasion debate ā whatās the difference?
Tax evasion means concealing income or information from the HMRC and itās illegal.
Tax avoidance means exploiting the system to find ways to reduce how much tax you owe or pay. Not illegal.
Everyone should be doing the latter within the realms of legality!
Very true, and only about 15% of my total income from both companies is dividends the rest is PAYE salary.
Youāre right that the gap is shrinking and over time it will become more inline with PAYE taxation.
I guess I get a bit defensive when I hear ātax dodgeā but as stated above, we all should seek legal ways to reduce the tax we pay.
The problem with tax avoidance is that I suspect it mostly benefits the wealthiest as they are best placed to take advice on how to minimise their taxes. That feels inherently unfair if the tax system is complicated enough to prevent everyone taking full advantage of the legal tax avoidance possibilities.
Two things:
First, when people make arguments about ātaxing rich vs taxing poorā, Iād like to remind them that in the UK, because it doesnāt recognize family for purposes of taxation, there is special kind of people who are taxed as rich, donāt have any access to support programs, while having often average income - people in single income families. This is especially exacerbated by what is known 60% income tax trap - when you are slightly above 100k a year.
I was in this situation - family of four, I am earning slightly above 100k, my income per person in household is 25k, but I am taxed at marginal rate of 60% + National insurance. And because I am so rich, I donāt have access to any child related financing (except for childcare vouchers, which are being phased out).
I am better off now, but whenever somebody brings up ātax rich moreā narrative, I always recall this built-in injustice in the UK tax system. In many other countries single-income families are treated much better. And I am not saying that 100k for 4 people is not enough (though in London it can feel so), what I am saying is that taxing me, with a family to feed, the same way as taxing single person earning the same money is not fair.
Second, I feel that for British people NHS is that golden cow, religion of sorts, which cannot be touched or reformed. And there is a certain layer of people who know that and exploit it to the fullest extent. They know that whatever they do, the only things politicians can do without ruining their re-election chances is to throw more money at them.
But at the same time they are not ashamed to spend loads of money on promoting racism with their CRT/DEI programs - teaching their staff that my race is the worst thing that happened in the history of humanity. And as me to give them more money for it.
Absolutely fine post until you - for some reason - managed to bring racism into a NHS/tax discussion. 
This post was going so well untill the last paragraph @zholnin