Well they say that nothing ever stays the same, change is the only thing you can depend on (or is it death and taxes). The new tax year 2017/2018, starting on April 5th, 2017, will be no exception. Some of the changes may impact your business, so it’s a good idea to keep abreast of them. Of course, if you are one of our clients, we’ll take care of all of this for you, but just so you know what to expect, these are the highlights!
National Living Wage
The National Living Wage will be going up to £7.50 an hour for the new tax year, so all businesses must ensure that they are paying employees the correct minimum hourly rate from April 6th.
Personal Allowance Increase
From April 6th, your personal allowance increase will rise to £11,500 and the threshold for the higher tax rate will be £45,000. So time to check you have the correct tax code for employees.
As we all know, business rates are going up this tax year. However, there should be some tax relief to help businesses hit by stark increases caused by the reevaluation.
Finally, something going down! Corporation Tax is set to go down from 20% to 19% this year and a further drop will kick in in 2020 to 17%. The measure is designed to attract inward investment, especially now, in the Brexit environment and the UK now has the lowest corporate tax rate in the G20.
Making Tax Digital
HMRC have been talking about making tax digital for some time now, and the deadline for businesses with a turnover below the VAT threshold of £85,000 has now been deferred to April 2019. This is a welcome easing of the pressure, but most small businesses will benefit greatly from digitising, so really they shouldn’t delay. This is something we are REALLY good at! Yep, we’re tooting our own horn, so if you haven’t started the journey to Making Tax Digital yet, let us know and we can make it easy for you.
Mortgage Tax Relief
The phasing in of changes to mortgage tax relief begins now. So property investors will no longer be able to deduct costs at a rate of 40 or 45%. The allowance will be reduced over 3 years to a standard rate of 20% by 2020.
Not quite yet, but this is the last year when you can make tax-free dividend payments of £5,000, the allowance is going down to £2,000 in 2018. So, make the most of it.