The Chancellor of the Exchequer delivered his budget on 16 March 2016. We will summarise below some of the main changes which have been made to taxation for individuals and small businesses.
If you have specific questions or concerns regarding any of the changes in the budget and how they will affect your own circumstances please give one of our highly skilled team a call and we can make an appointment to advise you directly.
Income Tax and National Insurance
The personal allowance has been set to increase from £11,000 in 2016/17 to £11,500 in 2017/18. Furthermore the higher rate threshold has been increased to £43,000 in 2016/17 and £45,000 in 2017/18.
From April 2018 National Insurance for the self-employed will be changing with Class 2 contribution abolished and Class 4 contributions reformed although the exact nature of these reforms has yet to be confirmed.
The rate of corporation tax has been falling in recent years and this budget has continued that theme. The current rate of 20% for 2016 will be reduced to 19% in 2017 down to 17% in 2020.
If you have previously considered incorporation we would advise that you contact us to review your options in light of these changes.
Capital Gains Tax (CGT)
There was surprise when the chancellor announced a cut in the rates of Capital Gains Tax with the 18% rate being cut to 10% and the 28% higher rate being cut to 20%. This change applied from 6 April 2016 but does not apply to residential property sales and does not affect properties that qualify for private residence relief.
If you are currently in the process of disposing of any assets you should revisit your taxation advice and may need to get fresh advice if your disposal will fall after 6 April 2016.
There were a number of other announcements such as the new pensions ISA’s available from April 2017, National Minimum Wage rates for October 2016, changes to small business rate relief and further clarification of the new Stamp Duty Land Tax changes. If you would like further information about any of these or any other tax or accounting issue please give us a call. More detailed analysis of some of these issues will be posted to our news feed over the next few weeks and months as more details are announced.