With a new Conservative parliament, comes a new budget to coincide. So what will the new budget mean for you and your business …
Firstly, the National Minimum Wage for over 25’s is set to rise to £7.20 per hour from April 2016.
National Minimum Wage will then increase to £9 an hour by 2020, as part of the Government’s plan to provide a ‘living wage’ for all workers.
The tax free Personal Allowance will increase to 11,000 in 2016/17. This change means that since 2010, a typical taxpayer is to be £905 better off per year.
The Personal Allowance will then rise to £12,500 a year by 2020, and it will be introduced that from this level those working 30 hours per week on National Minimum Wage will pay no income tax.
The higher rate tax threshold will increase to £43,000 in 2016-17.
Corporation Tax rates are set to be cut to 19% in 2017, and then to 18% in 2020.This has already been cut from 28% to 20% since 2010, and these newer rates by 2020 will benefit more than 1million businesses.
Employment Allowance will rise to £3000 from April 2016, which means that businesses National Insurance bills will be cut by a further £1000 per year. Next year this means that a business can employ four full time employees on Minimum Wage, yet have no National Insurance to pay.
As for dividends, you will now have to pay tax on any didvidend income over £5000. Basic Rate Tax payers will be required to pay 7.5% on their dividends and Higher Rate Tax payers 32.5%.
If you would like to know more and need any advice on the new budget plans, then contact Kayleigh on 07525 421 454 or at Kayleigh@darceyandbateaccountants.co.uk.