Silver Financial

  • Home
  • Services
    • Contractors and consultants
    • Owner managed businesses
    • Finance Director consultancy
    • Incorporation
  • Online accounting
  • About
  • Technical blog
  • Contact
You are here: Home / Owner managed business / Summer budget 2015

Summer budget 2015

The Summer Budget 2015 introduced a number of measures which will directly impact small incorporated businesses:

Employment allowance

From April 2016 the employment allowance which currently allows an employer to reduce their employer’s NI by £2,000 a year will be increased to £3,000 a year. This allowance will however no longer be available for companies where the director is also the sole employee.

Corporation tax

Corporation tax is to be reduced from 20% in 2016, to 19% in 2017 and 18% in 2020.

Annual investment allowance

This allowance which gives full tax relief to business investments in assets and equipment will be reduced from £500,000 to £200,000 from 1 January 2016.

Tax on dividends

From April 2016 the current system of tax credits is to be replaced with a dividend tax allowance of £5,000.

Additionally, effective dividend tax rates will be increased to 7.5% in the basic rate band, 32.5% in the higher rate band and 38.1% in the additional rate band. The current rates are 0%, 25% and 30.56% on the net income.

Income tax

From April 2016 the personal allowance will increase from £10,600 to £11,000 and the higher rate tax threshold will increase from £42,385 to £43,000.

IR35

Contractors should note that the government will be conducting a review of IR35 to “improve the effectiveness” of this legislation as it is currently considered insufficiently robust.

From April 2016, structuring through a limited company will still be more tax efficient than operating through an umbrella company or as a sole trader – only less so than is currently the case. Operating a limited company will still facilitate more tax planning opportunities, allow for a greater range of allowable expenses to be claimed and keep business and personal assets separate. A company also has the cash flow advantage over a sole trader of not having to make payments on account to HMRC.

Share this:
linkedinlinkedin

Recent posts

  • Budget 2017
  • Autumn statement 2016
  • Tax efficient dividends and salary for directors for 2016/7
  • The Companies House confirmation statement
  • P11d dispensations
  • Budget 2016
  • Charging a business for mobile phone costs
  • Running a limited company

Follow Us

linkedinlinkedin

Our approach

Our philosophy is to keep things simple, talk straight and deliver value added financial solutions, tailored to your needs. We use the latest online accounting technology and take a proactive approach to supporting your business.

Find out more about us.

Technical blog

  • Budget 2017
  • Autumn statement 2016
  • Tax efficient dividends and salary for directors for 2016/7
  • The Companies House confirmation statement
  • P11d dispensations
  • Budget 2016
  • Charging a business for mobile phone costs
  • Running a limited company

Contact

Mobile: 07899 405500

Or complete our contact form.

Copyright© 2022 silver financial · all rights reserved · silver financial is a trading name of silver financial management limited · disclaimer · privacy