How will the budget affect you?
9th July 2015
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Article by Turner & Co

Following Chancellor George Osborne’s budget on 8 July Margaret Turner from Turner & Co Chartered Accountants has summarised the change affecting businesses:

  • Corporation tax will be reduced to 19% in 2017 and 18% in 2020.
  • There will be a £5,000 tax free allowance for company dividends with tax rates at 7.5%, 32.5% and 38.1% on any dividends above this amount. The 10% tax credit will be abolished.
  • The employment allowance will increase from £2,000 to £3,000 in 2016 reducing employers’ NI contributions. This will not, however, apply where the sole employee in a company is a director.
  • A national living wage is being introduced for over 25s in 2016 at £7.20 rising to £9 in 2020. This replaces the current minimum wage which is £6.50.
  • The annual investment allowance for capital expenditure will be fixed at £200,000.
  • The personal tax allowance is to rise to £11,000 in 2016 and again each year to £12,500 in 2020.
  • The higher rate tax threshold is also due to rise.

“Some of these changes will not be implemented for some time and we are still awaiting the final detail on many of these changes”, says Margaret “but, if in doubt, seek expert advice from your accountant.”

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