Murgitroyd plans three dividends to beat tax rise

Published on Friday 12 March 2010 21:25

MURGITROYD, the Aim-listed Scottish patent attorney company, expects to pay three dividends this year as it moves to avoid a new tax increase.

Chancellor Alistair Darling last year announced a range of tax increases for high earners, which includes an increase in tariffs on dividends.

In recent weeks, a string of companies in which individuals hold substantial stakes have said they would pay "second interim dividends" in an attempt to circumvent the higher taxes. Stagecoach, Robert Wiseman Dairies, Goals Soccer Centres and British Polythene Industries have all paid second interim dividends.

All of those companies have also warned that the second dividend meant they would not recommend a final dividend with their annual results.

But Murgitroyd said it expected to pay both the second interim and a final dividend. The payment of the latest 5p dividend will cut the tax bill of the firm's founder and executive chairman Ian Murgitroyd, who owns 29 per cent of the company.

There are no rules preventing companies from changing the timing of dividend payments. Craneware, which sells billing systems to US hospitals, recently more than tripled its interim dividend to avoid the tax increase, but is expected to recommend a much smaller final dividend.

While the moves will reduce the tax paid to HM Revenue and Customs, supporters think the UK government should welcome earlier payments at a time when the deficit is rising.