The Chancellor delivered the Budget yesterday (March 9), with a number of announcements affecting businesses, working parents and the self-employed. Here are a few at-a-glance key points:
Making Tax Digital (MTD)
Landlords and small businesses (unincorporated businesses) below the VAT threshold of £83,000 will have plenty of time to prepare for MTD as this has been postponed until April 2019, after which it will become mandatory.
Corporation Tax will be reducing to 19% from April 2017 and it will fall again to 17% by 2020. The self-employed will face an increase in tax with class 4 NI rising from 9% to 10% in April 2018 and 11% in 2019. The abolition of Class 2 NI will go ahead in April 2018. Read more about Corporation Tax and how you can pay it here. Update: The Chancellor has since dropped plans to increase NI rates for the self-employed.
The dividend allowance – the amount of dividends that company directors and shareholders can receive tax-free – will be reduced from £5,000 to £2,000 from April 2018.
The Government will provide further support for pubs and small businesses facing significant increases in bills. The new measures will see 90% of pubs receiving a discount on their small business rates bill, while small companies set to lose their rate relief will see increases capped at £50 a month. This cap will apply for five years.
This will be available from 6th April 2017, allowing those who qualify to save up to £4,000 each year and receive a bonus of up to £1,000 a year from the Government on these contributions. These funds can be withdrawn tax-free to put towards a first home or can be saved until a person turns 60.
Tax-free childcare will soon be available to working parents of up to £2,000 a year for each child under 12yrs. Parents with disabled children will receive up to £4,000 for disabled children up to the age of 17. Working parents in England will also be able to apply for an additional 15 hours of free childcare for 3 and 4 year olds (total of 30 hours a week).