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Rethink on dividend tax

Andrew Verity
Thursday 25 June 1998 23:02 BST
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THE TREASURY is next week expected to make a last-minute change to a key plank of its July Budget after being warned it would unfairly rebound on more than half a million shareholders who are too poor to pay tax.

Geoffrey Robinson MP, the paymaster general, is on Tuesday expected to table an amendment to give relief to pensioners, children and unemployed shareholders who would be hit by the centre-piece of Gordon Brown's July Budget, the abolition of dividend tax credits.

The abolition was attacked by the Opposition last year for its effect on pension funds, which the Treasury estimated would get up to pounds 5bn a year less in tax reliefs.

But it has since emerged it will also hit more than 300,000 non-taxpaying pensioners who supplement their pension with dividend income. According to Age Concern, which met Mr Robinson yesterday, some pensioners are set to lose hundreds of pounds each, while the Treasury would gain just pounds 50m.

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