End of the tax year

The end of the tax year 2017/18 is approaching, and as such there are a few things we should be thinking about;

– the dividend tax free allowance of £5,000 is available up to 5th April 2018. From 6th April 2018 this allowance reduces to £2,000. Make sure your shareholding in your company reflects this change, and that you are making best use of your allowance.

– the personal allowance is £11,500 this tax year, and increases to £11,850 in 2018/19. If your personal income is made up of salary and dividends you can earn up to £13,850 without paying tax or NI in 2018/19, this figure was £16,500 in 2017/18.

– National insurance primary earnings threshold increases from £8,164 this tax year to £8,424 in 2018/19. This means that you can earn £702 per month without paying PAYE/NIC in 2018/19.

– If you’re self employed then profits under £8,424 will attract no tax or NI in 2018/19, this has increased from £8,164 this tax year.

– Higher rate tax applies to personal income/self employed profits over £46,350 in 2018/19, this figure is £45,000 in 2017/18.

– For those with limited companies the Corporation Tax rate is to remain the same in the coming tax year, at 19%.

– if you have a personal pension, you have until 5th April 2018 to put additional funds into your pension, so any personal tax relief can be claimed for 2017/18.

The above figures are only relevant for residents of England and Wales.

More detailed advice about how these changes affect you should be sought from your accountant.