Thursday 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.

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).


May deadline dates for HMRC and Companies House

 If you are involved in the running of a Small Business you should take note of these key VAT, PAYE, Income Tax, National Insurance, Corporation Tax and Companies House dates for May


Give yourself a gift and save tax

 A company can give gifts up to £50 in value to its directors and secretary, without creating taxable benefits. In other words, you can receive a gift from your company and reduce your corporation tax bill.


How paying rent for your home office can save you tax

 This is a great tax tip on how to take funds out of your company with little or no tax to pay