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Budget 2017 summary: what does this mean for us?

9/3/2017

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This is a huge debate with far too many words and discussion floating around. So what does Philip Hammond’s budget actually change? Here is a summary of his proposals of relevance to the average self-employed person.
Personal tax implications are as follows:
·         Tax-free allowance on share dividends to reduce from £5,000 to £2,000
·         Personal tax-free allowance to rise to £11,500 this year (from £11,000), then slowly up to £12,500 by 2020.
·         The higher rate tax bracket will rise from £43,000 to £45,000.
·         A new £1000 allowance against property income and the same for trading income will be introduced from 6th April 2017.
·         Class 4 National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019.
·         Class 2 National Insurance, currently applicable once self-employed people make a profit of over £5,965 a year, will be scrapped in April 2018.
·         The above will cost the average self-employed person around £240 extra per year, although those earning below £16,250 will end up paying less.
·         Employed people will not experience any change to their National Insurance contributions and nor will the employers.
A useful budget calculator tool to see how you will be affected can be found on http://www.bbc.co.uk/news/business-17442946
Another important change to note is that Corporation tax is being reduced to 19% from 6th April 2017, with the goal of reaching 17% by 2020.
If you would like to discuss this further or to discuss your accounting needs for 2017/18 please feel free to get in touch with our friendly team on 01275 873948 or by using our contact form.
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