Summer Budget update
The two particular elements of the budget that I am not happy about are the increase in minimum wage, which could be as high as £9.00 per hour by 2020, and the introduction of an additional layer of personal tax on dividend income.
On the plus side, a reduction in the rate of corporation tax from 20% to 19% in 2017 and to 18% in 2020, an increase in the NIC employment allowance from £2,000 to £3,000 and an increase in the personal allowance to £11,000 and higher rate threshold to £43,000 (after personal allowance) in 2017 will help offset the above increases. However, from April 2016, one-man companies will no longer be able to claim the employment allowance.
Other key points that I would like to bring to your attention are:
New rules will be phased in which will restrict tax relief for finance costs for higher rate taxpayers who use loans to finance buy-to-let properties.
- The inheritance tax nil band is frozen at £325,000 until April 2020.
- An annual investment allowance of £200,000 from January 2016 for the life of this parliament. There were fears that this could decrease to £25,000.
- From April 2016 the government will introduce a statutory exemption for trivial benefits in kind costing less than £50.
On a final note, the tax legislation seems to have become even more complex and I am not sure what has happened to the noises of simplification! If there are any aspects of the above that you would like to discuss with us then please feel free to call: 01565 977 977.
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