 Photo by Kelly Sikkema on Unsplash | The point at which people will pay income tax rises to £11,850 for 2018/19 which is some £350 higher than the current year. From April 2018, spouses and civil partners may transfer £1,185 of their personal allowance to each other. The point at which people pay higher rate tax has risen and will be £46,850 for 2018/19. |
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.
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.
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