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Points from the 2015 Summer Budget…..

HMRC - Copyright SBA Tax & Accountancy LtdDividend taxes to be changed

This could be a big one!!  Until more details are released we won’t know the impact it will have on how small business owners remunerate themselves.

The usual dividend tax credit, which means there is usually no additional tax to pay if you are a basic rate tax payer, will be replaced by new £5,000 tax-free dividend allowance.  The tax rates on dividend is also set to be increased!  It appears the governments plan is to tax those with “significant dividend income” more, although it is unclear what will be deemed as significant?  Those with modest (I presume less than £5,000) will see no change or a cut in the tax paid.

As soon as we have more information on this we will post another blog.

**UPDATE** 

More details on the above dividends tax changes are available and it looks as though dividends within the basic rate band will attract a 7.5% tax liability!!  This means if you take around £28,000 of dividends per year and a £10,600 salary you tax bill will go from around £0 to around £2,000!!!  That is a huge increase, not so good for small businesses!!  When the finer details are known we’ll let you know. 

 

Corporation Tax

Hooray!!  Corporation tax is set to be cut by 2% by 2020, down to 19% in 2017 and 18% in 2020.  This seems to be a good thing, but I’ll reserve judgement until we see how the dividends tax is going to be changed – it may well be six of one, half a dozen of the other!  Looks like this is a small token to owner managed businesses to compensate for the increase in the dividends tax increases above. Read more

simple but effective

A simple but effective video from HMRC about record keeping, especially about making it easier to see how much tax is likely to be due  (I would say that as an accountant though!).  If you struggle with keeping your books and records up to date/in order, get in touch, we can help.  As accountants we can put you on the right track by recommending which record keeping method may suit you best.  We don’t charge for an initial consultation, so get in touch using the contact section above.

PFP

Peace of mind should HMRC come knocking….

#keepmoremoney

We are now working in partnership with PFP to offer our clients fee protection cover. In the event of an enquiry from HMRC the PFP cover will pay for the professional fees associated with defending you and your business against HMRC, which can often run into thousands rather than hundreds of pounds. If you would like more information please get in touch #keepmoremoney