budget 2016

Budget 2016 Summary: Important changes affecting your business

The Budget announcements that happened in March have left many of us with mixed emotions and some unaware of what it means for their business. Here is a simple breakdown of the Budget 2016 and the relevant key points that could or will affect your business this year.

Dividend tax changes

New £5,000 tax free dividend allowance is to be introduced with increased rates of dividend tax thereafter.

Personal Allowance

The amount an individual can earn before having to pay income tax is increasing to £11,000 and we expect this to rise to £11,500 in April 2017, according to an announcement made by George Osborne.

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Child and Working Tax Credit

If you are unsure whether you are entitled to child or working tax credits, this article talks you through everything you need to know. The figures used in this article are correct for the 2015-2016 financial year.

Child Tax Credit

You are eligible for child tax credits for each child you are responsible for, under the age of 16 or under the age of 20 and in approved education or training. Every household differs as to how much tax credit one is entitled to. For 2015-2016, you could be entitled to a basic amount of £545 a year. This is known as the ‘family element’. You could be entitled to an extra amount depending on your income and circumstances including:

  • Up to £2,780 for each child
  • Up to £3,150 for each disabled child (on top of the child element)
  • Up to £1,270 for each severely disabled child (on top of the child element and the disabled child element)
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