What did the budget mean for your business?

Jul 23, 2015

Croombs Chartered Accountants in Hampshire

Following the budget from 8 July, we thought it would be useful to highlight the key points affecting our business clients.

Personal Allowance

This is to increase to £11,000 in the next tax year with the government committing to increase it to £12,500 by the end of this parliament.  This will take even more people out of paying tax.

Corporation Tax

This is the tax that companies pay on their profits.  The rate will reduce to 19% in the 2016 year and 18% the following year.  This will help companies offset the increase in the minimum wage to living wage.

In addition the government are offering incentives to businesses that invest in new assets up to £200,000 per year.

Inheritance Tax

This is to increase over the next parliament which will then ultimately give an Inheritance Tax exemption of up to £1 million.

Dividends

Company owners who take their income as dividends will receive the first £5,000 tax free and then pay 7.5% on additional dividends up to the higher rate tax band.  Anyone receiving dividends in excess of this figure will pay 32.5% in tax up to the additional rate band.

Buy to let landlords

Higher rate income tax payers will see tax relief on mortgage interest payments slowly phased out from 2017 so that they only receive basic rate tax relief on the payments.

We would recommend that you speak to your Accountant or give us a call as soon possible as these changes are commencing from next year and proper advice is vital to ensure you pay the right amount of tax on your earnings.

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