You may be wondering how the greatly talked about Spring 2017 budget could potentially impact your life in the future. Here we discuss the possible impact on your personal financial circumstances.
What if you are…
1. A Director or shareholder of a limited Company?
The dividend allowance is being reduced even further; from April 2018, only £2000 will be tax free, compared to the £5000 currently allowed.
Additionally, Corporation Tax is being reduced to 19%, from the current 20%.
2. An individual who pays National Insurance?
If you are employed, then there are no changes that will affect you. For the self-employed, however, Class 2 contributions are being scrapped. (This is the flat rate that many pay on a weekly or monthly basis). This would save the average self-employed person £146 per year.
Class 4 contributions, which are paid on any profits over £8060, are staying at 9%.
3. An employee?
The amount you can earn tax free from April 2018 will be £11 500. Additionally, the higher rate threshold (above which you are taxed at 40%) is increasing to £45 000.
4. Subject to business rates?
The government is providing extra support for those who are facing significant increases in their business rates. Those who are losing Small Business Rate Relief will have their new rates capped at the greater of £600 or the real terms transitional relief cap for small businesses. Additionally, the local government will be given extra funding to use at their discretion for those especially hit hard.
Pubs will receive an additional £1000 annual discount (for rates up to £100 000).
5. None of the above?
There are various other announcements that the government is hoping to achieve. For example, funding is being set aside to create a 5G mobile network, to increase coverage and internet speeds.
Also, an additional £2 billion is being sent to councils to provide adult social care services, and £100 million for investment in A&E services.
If you have any further questions about the impact of the Budget on your personal or corporate situation, please don’t hesitate to get in contact with us for tax planning or consultancy advice.