Today the Chancellor Philip Hammond has delivered, what is to be the last, Spring Budget.
There were a number of surprise announcements such as increase in national insurance contributions and reduction in tax-free dividends allowances prompting a furore between self-employed and owner-managed businesses.
Below we have summarised the key tax points affecting individuals and corporations:
Dividends
Company directors and private shareholders will have their tax-free allowance on dividends cut from £5,000 to £2,000 from April 2018.
National Insurance contributions
Class 4 NIC is to increase to 11% by 2019 for self-employed workers with profits in excess of £8,060.
Personal allowances
Income tax personal allowance will rise for the seventh year in a row to £11,500 and the higher rate threshold is to increase to £45,000 from April 2017.
VAT Registration threshold
VAT registration threshold will rise to £85,000 and the deregistration threshold will increase to £83,000.
Child Care Benefits
From September 2017, free childcare for three and four year olds is to increase from 15 to 30 hours, worth up to £5,000 for each child.
Road Tax
Road tax for vehicles registered before April 2017 is to increase in line with RPI. It is expected that it will cost individuals no more than £5 extra in tax per vehicle.
Corporation tax
Corporation tax is to reduce to 19% from April 2017.
VAT on roaming charges
VAT is to be introduced on UK roaming telecoms services used outside the EU. This will result in 20% hike in call charges made when abroad.
Pensions
Transfers of UK pensions offshore could face 25% tax charge from 9 March 2017.
Business rates
It is expected that businesses coming out of small business rate relief will not see their bill increase by more than £50 a month. £1,000 discount will be offered to pubs with a rateable value of under £100,000.
Making Tax digital
Introduction of Making Tax Digital is delayed for those under the latest £85,000 VAT threshold.
If any of the new announcements affect you or your business and you would like to discuss it further with one of our specialists, you can contact AVEY of London on:
Tel: 01707 691 783
Email: info@aveyoflondon.co.uk
This guidance is designed to alert to an important issue of general application. It is not intended to be a definitive statement covering all aspects of the related legislation. It is only a brief summary and no action should be taken without consulting the detailed legislation or seeking professional advice. No responsibility for any person acting or referring to act as a result of any material contained in this guidance can be accepted by AVEY of London.