Budget 2017

 

Big Ben with city bus and flag of England, London

Key changes for smaller businesses:

Dividend Allowance

For 2016/17 and 2017/18 the dividend allowance is £5,000, you can take this dividend tax free and if you can you should take it because in 2018/19 the allowance will drop to £2,000.

National Insurance

Planned changes for the Self Employed, from 2018/19 class 2 NI will be abolished. The changes to Class 4 NI have now been cancelled.

Pension Contributions

If you have drawn down your 25% tax free, contributions will be limited to £4,000 from 6th April 2017 (money purchase annual allowance) prior to that the limit was £10,000.

The pension annual allowance remains at £40,000 for everyone else.

Making Tax Digital

The start date for the self employed and landlords with turnover below the VAT threshold has been push back to April 2019. MTD will require tax payers to report their profits every quarter to HMRC.

If your turnover is above the VAT threshold you will have to start MTD in April 2018.

Partnership Taxation

The government has confirmed that there will changes to partnership taxation in the Finance Bill 2018 to ‘improve aspects of partnership taxation’

Unincorporated Property Businesses

Unincorporated property businesses with income below £150,000 will be able to use the cash basis of accounting

Business Rates

In addition to the £3.6 billion transitional relief announced in November, there will be £435 million of further support.

This includes:

  1. Support for small businesses losing Business Rate Relief and limiting increases to £600
  2. Providing English local authorities with £300 million as a fund for discretional relief

Salary Sacrifice

From the 6th April 2017 Salary Sacrifice can only be used for:

  • employer pension contributions and pensions advice
  • childcare vouchers, employer-provided childcare and workplace nurseries
  • cycle to work schemes
  • ultra-low emission company cars (emissions not exceeding 75g/km)