Budget Updates – has it affected you?
Mr Hammond announced his first budget as chancellor yesterday and here’s is a list of key points for small businesses and business owners that could affect you.
The Dividend allowance, presently at £5,000, has been cut to £2,000. This means many owner-manager businesses will see them paying tax sooner. If they are a higher rate earner, this could mean an additional £1,200 in tax next year
National Insurance Class 4 for the self-employed increases from 9% to 10% in April 2018 and 11% in April 2019. His argument is that the self-employed use the same services as a the employed, therefore why shouldn’t they be paying the same. However, the Class 2 National Insurance flat rate will be scrapped as planned from April 2018.Since publishing this note originally, The Chancellor made a ‘u-turn’ on his decision about national insurance and has declared that there will be no increase in national insurance percentages.
The personal tax-fee allowance currently set at £11,000 will rise to £11,500 next year and £12,500 by 2020
The VAT registration threshold currently set at £81,000 will rise to £85,000
Corporation tax will reduce from 20% to 19% from April, It’s also said to fall to 17% by 2020. This is aimed at encouraging investment whilst we progress through the Brexit
If you have any question on how the budget changes will affect your business or business planning, please feel free to get in touch. We’re here to help.