Autumn Budget 2016
...Key points for small businesses
Here's a quick run down of how the Autumn Statement will effect small businesses this year.
Personal allowance and higher rate threshold
For the 2017 / 2018 tax year, the personal allowance will rise to £11,500 and the higher rate threshold to £45,000.
National insurance contributions (NICs)
The primary and secondary NIC thresholds for employees and employers will be aligned at £157 a week in 2017/18.
Class 2 NIC will be abolished from April 2018. For 2018/19 onwards, benefit entitlement for the self-employed will be based on their Class 3 and Class 4 NIC records
Corporation tax rates
The Chancellor reconfirmed the planned reduction in corporation tax to 17% in 2020. The rate of corporation tax from 1 April 2017 will be 19%.
Reform of loss relief
The profit that businesses can offset against carried-forward losses will be restricted to 50% from April 2017, while greater flexibility will be allowed on the types of profit that can be relieved by losses incurred after that date. The restriction will be subject to a £5m allowance for each stand-alone company or group.
VAT flat rate scheme
A new 16.5% rate will be available from 1 April 2017 for businesses with limited costs, such as many labour-only businesses.
Guidance was published on 23 November, and we will share more details in due course.
The pensions money purchase annual allowance (MPAA) will be reduced from £10,000 to £4,000 from April 2017.
This limit applies to people who have accessed their pensions flexibly and under the current rules may be obtaining tax relief on up to £10,000 of recycled pensions income.
If you have not yet started to draw your pension the limit on annual pension contributions remains £40,000.
Insurance premium tax will be increased from 10% to 12% from 1 June 2017.
If you have any questions about how this will affect your business, please give us a call.