News

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).

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