Are You Sick of All the Budgets?
Mar 17, 2016
I am, I may be an accountant but I’m getting really sick trying to keep up with all the changes in tax. In particular the assaults on small business owners, like dividend changes and Entrepreneur’s Relief. However this latest budget may actually have some good news for us all.
I've set out some of the changes below, but if you want more detail I've attached a document that has a lot more detail. You can download it here Budget Info
So what was your most interesting part of yesterday’s budget? For me it was the focus George Osbourne gave to the next generation, anyone of my age is a lost cause!
The Lifetime ISA is intended to encourage people aged 18 to 40 to save for starter homes, or for their retirement, by adding a cash bonus from the Treasury to savings. Whilst the extra revenue raised from the sugary drinks levy will go in England to support Sports and Arts in schools. Scotland, Wales and Northern Ireland have yet to decide what they’ll do with their share of the levy.
We know the personal allowance is going up to £11,000 from 6th April and it’s just been announced a further £500 to £11,500 in April 2017. This will reduce tax by £180, so don’t get too excited!!
One of the biggest changes, that might affect you as a small business owner, is making small business rates relief permanent. From April 2017 if your rateable value is below £12,000 (£10,000 in Scotland) you won’t pay any business rates at all. But, they do plan to bring in regular revaluations of business premises from that date too. So be aware, you could end up worse off.
Other good news sees Capital Gains tax cut from April. It goes from 28% to 20% (higher rate band) and 18% to 10% (lower rate band). So wait until 6th April before you sell that really expensive collection of fine wines! If it’s residential property, no need to wait - it won’t apply to your buy-to-let!
If you’re an employer though it may not be good news if you make a termination payment more than £30,000 to a member of staff you will have to pay Employers NI on it from April 18.On the other side if you’re self employed you will no longer have to pay Class 2 Ni from the same date which means a saving of £145.
Finally stamp duty land tax is changing on commercial property which will mean some savings for you if you’re buying property worth up to £1.05m. This won’t apply in Scotland as we have devolved powers on this own.
As Scotland gets fully devolved powers for taxation all this could change again anyway. So if I decide to retrain as a yoga teacher, you’ll know the reason why!!
If you are interested in seeing more detail, just download the report here Budget Info