Articles

Thursday 22nd March 2018

New tax year - changes that affect small businesses

 Employers

Pension auto enrolment contributions increase to 2% for employers and 3% for staff. This applies to all existing and new staff on the payroll, except for directors without a contract of employment.

The national living wage (for those aged 25 or over) increases to £7.83 per hour, and the national minimum wage levels increase for younger people – see the new rates here.

Personal tax

The personal allowance increases to £11,850, meaning basic rate tax payers will be £70 per year better off.

The higher rate tax threshold increases to £46,350, so you will pay 40% tax on income over this amount.

Unfortunately, the dividend allowance decreases to £2,000. Any dividends over this amount will be subject to at least 7.5% tax (assuming your personal allowance is all used for your earned income).

XERO CERTIFIED CLOUD ACCOUNTANTS

We will link your business bank account to Xero software. All your income and expenses will feed directly in to Xero. This saves you time in preparing your year end paperwork, and you can even store your documents in Xero