do I have to pay National insurance for my dividends?

cherry2017

I knew I have to pay dividends tax rate, but how about NI, do I have to pay NI for the dividends amouts? thanks

Grumpy_chap

No.
Dividends are not earned income.

I did read a suggestion that the future Health and Social Care levy (or whatever it is called) will also apply to dividends.  I don't know whether that is correct.  It doesn't apply until the future (next tax year) either way.  

Dazed_and_C0nfused

You only pay income (dividend) tax on the dividend income, not National Insurance.

But 3 of the 4 dividend tax rates are increasing.  The 0% rate is staying the same.

[Deleted User]

Grumpy_chap said:

No.
Dividends are not earned income.

I did read a suggestion that the future Health and Social Care levy (or whatever it is called) will also apply to dividends.  I don't know whether that is correct.  It doesn't apply until the future (next tax year) either way.  

It does but, strangely 🤔 not on property income!

https://www.gov.uk/government/publications/increase-of-the-rates-of-income-tax-applicable-to-dividend-income

Jeremy535897

[Deleted User] said:

Grumpy_chap said:

No.
Dividends are not earned income.

I did read a suggestion that the future Health and Social Care levy (or whatever it is called) will also apply to dividends.  I don't know whether that is correct.  It doesn't apply until the future (next tax year) either way.  

It does but, strangely 🤔 not on property income!

https://www.gov.uk/government/publications/increase-of-the-rates-of-income-tax-applicable-to-dividend-income

My understanding is that the logic is that people who have personal companies can avoid the levy by paying dividends. It will also catch investors who receive dividends from unconnected companies, so it is not targeted. I understand this is because the tax return does not distinguish between dividends from personal companies and dividends from unconnected investments (the same reasoning behind excluding personal company dividends from furlough calculations). Before anyone points out how easy it would be to change the tax return to deal with this issue, bear in mind that if they did, the next step could be the levying of full employee NIC on personal company dividends.

[Deleted User]

Yes - of course I meant that most people are affected by the levy but not those, for example, whose income is derived from property. I wouldn’t want to confuse by suggesting that there has been no increase in NI for property owners when they didn’t pay NI on this income in the first place. 

Grumpy_chap

[Deleted User] said:

It does but, strangely 🤔 not on property income!

Maybe because an additional cost against rental property income fairly quickly results in higher rent.

Jeremy535897

Grumpy_chap said:

[Deleted User] said:

It does but, strangely 🤔 not on property income!

Maybe because an additional cost against rental property income fairly quickly results in higher rent.

No, the reason is as I said above.