Budget changes for small businesses
In the recent budget there were a few announcements which affect small businesses and business owners;
- The personal allowance is to increase from £11,000 in 2016/17 to £11,500 in 2017/18.
- The higher rate threshold will increase from £43,000 in 2016/17 to £45,000 in 2017/18.
- Earnings up to £1,000 from occasional income will be tax free. Examples 0f occasional income are; providing a lift share, selling home made goods, and income from property, such as renting out a driveway.
- Class 2 National Insurance contributions for the self employed will be scrapped from 2018/19. Class 4 NIC’s will still be payable on profits. From April 2018 Class 4 NIC’s will be reformed to enable self employed people to build benefit entitlement to a State Pension and other contributory benefits, instead of it being based on Class 2 NIC’s.
- The Corporation Tax rate for small profit (under £300,000) companies is currently 20%. From April 2017 this will fall to 19%, and from April 2020 it will fall again to 17%.
For other changes announced in the budget have a look at the HMRC website at www.gov.uk.
If you’d like to know more about how these changes will affect you please contact Alison at [email protected], or call on 01207 582528 at Mark Stanley Accountants Ltd.