Photo by Kelly Sikkema on Unsplash | The Chancellor delivered his Autumn Statement this week. Many of the measures announced were given much advance coverage and in one or two cases were not as tight as many had predicted. In this latest blog I've covered the major points of interest for my followers and readers to make sure you get the information you might need. It's in manageable portions and in plain language to make things easier to follow |
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I have set out the main changes below although there remains some uncertainty on some of the transitional rules for things like Capital Allowances.
The thresholds at which people pay National Insurance have not risen as significantly so employees and sole traders can still expect to pay National Insurance even if there is no tax to pay. Contributions start after earnings exceed £162 per week £8,424 per annum which is the amount many directors will pay themselves from 6 April 2018.
Class 2 National Insurance (£2.95 per week) continues to be collected as part of the Self Assessment process and will be abolished from 6th April 2019 – not 2018 as originally announced to allow further time to design the new process. The reduction in the nil rate band for dividends to £2,000 (currently £5,000) will be implemented from 6th April 2018. This will result in a tax charge of an additional £225 per annum for owner managers of small companies.
Not surprisingly it will be frozen at £85,000 for the next 2 years whilst a consultation takes place on what the threshold should really be.
The current deregistration threshold is £83,000 and will continue to be the case. Digital taxation for businesses which are VAT registered and trading above the threshold will be implemented as planned in April 2019.
The changes are as follows:
It is important you review all employees on the payroll to ensure you are compliant. With the new ‘RTI’ payroll reporting in place it would be very easy for HMRC to spot non-compliant employers and indeed a number of businesses have already been fined, named and shamed. The Chancellor also announced that there will be no benefit in kind for people who charge their electric cars at work and at the same time has made some changes to the taxation of company diesel cars. He was clear to state this excludes vans. The cash equivalent where a van is made available to an employee for private use will increase to £3,350 for 2018/19 with the fuel benefit set at £633. The employment allowance continues at £3,000 and it is vital if you are a single director company that you do not claim this (even if HMRC basic tools or your software allows it) as HMRC are now carrying out compliance checks in this area and are set to collect underpaid National insurance. Recently I’ve been prompted to compose a blog post about the service I provide to the County. To say that I was prompted is an understatement. I was press ganged into writing this by two regular clients who you’ll hear from later. So… let’s do this then…
As always, this newsletter is designed to draw attention to specific topical issues and is in no way intended to provide advice tailored to your business - advice must always be sought before acting on any item featured. Best wishes Nigel In recent months more and more clients have bought a second property as an investment and are considering more properties. As a reminder when you let property it needs to go onto your Self Assessment tax return even if you make a loss, as HMRC are getting pretty skilled at spotting let properties! This also applies to making sure you complete the Capital Gains Section of your tax return when you come to sell it!
There have been subtle changes in the way let properties are taxed over recent years and more are to come:
For more information or to see how this may affect you or your business, contact me for details |
Nigel GorskiSay it as it is and you'll never be misunderstood. Here in the Blog you'll see news posts on many topics of interest to your and your business... Archives
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