The Spring Budget for 2017 has been and gone now but there are a few changes that we felt our readers could benefit from a better understanding of.
Among the announcements comes a change to National Insurance Contributions and a reduction in dividend allowance.
Both of these changes stand to affect small business owners, so we thought we’d take a closer look.
National Insurance Contributions
There are a number of changes that have been announced for National Insurance Contributions which stand to affect small businesses. For example, Class 2 contributions are to be abolished, with Class 4 contributions being reformed to include a new threshold. These changes have the potential to be quite complicated, but if your accounts are currently managed by us here at K.A. Farr & Co. then you can rest assured that we’ll be keeping you up to date and compliant.
You may also have heard that National Insurance Contributions were set to rise in the coming years. The Chancellor has since gone back on this announcement, and it remains to be seen whether any further changes will be made to this area of tax law.
Reduction In Dividend Allowance
Another change coming out of the Spring Budget is a reduction in the tax-free allowance for dividend income. From April 2018, this will be reduced from £5,000 to £2,000. The Government states it is making this change in the interest of fairness, to reduce the tax differential between the self-employed and those who work through a limited company. This measure should also help to raise revenue that can be invested in public services.
As always, we do our best here at K.A. Farr & Co. to keep our readers up to date on the latest changes to tax and accountancy law that stand to affect them.
If you currently use us for your accountancy services, you can rest assured that we’ll ensure you’re completely up to date and compliant with changes in the law.
If you’d like to learn more about what we offer, call us today on 01704 211 434 or fill in our online contact form and we’ll get back to you.