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:

• Increase the living wage from £7.50 to £7.83 per hour

• increase the rate for 21 to 24 year olds from £7.05 to £7.38 per hour
• increase the rate for 18 to 20 year olds from £5.60 to £5.90 per hour
• increase the rate for 16 to 17 year olds from £4.05 to £4.20 per hour
• increase the rate for apprentices from £3.50 to £3.70 per hour 

 
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.