The Budget 2017 – key points
Although most of the tax changes announced in the Budget on wednesday had been already released in the autumn statement there were a couple of big and very unwelcome surprises for small businesses and contractors, the increase in NI for the self-employed and the reduction in the dividend allowance for companies. More on these and one other point I’ve picked out as being signficant to smaller businesses below –
- Class 4 national insurance for the self-employed to rise from the current level of 9% on profits over £8,060 to 10% from April 18 and 11% from April 19.
- Tax free dividend allowance reduces from £5,000 to £2,000 from April 18. Dividends about this amount are taxed at 7.5% basic rate/32.5% higher/38.1% additional depending on your tax band. So for someone with total taxable income between £12,070 and £45,570 this will increase their tax liability by on average £225.
- Making tax digital implimentation for unincorporated businesses and landlords with turnovers below the vat threshold (currently £83,000 increasing to £85,000 in April) to be delayed by a year until April 2019.