BlogThursday 22nd March 2018
New tax year - changes that affect small businesses
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.
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).