In the past few weeks, Chancellor of the Exchequer Philip Hammond revealed his Spring Budget of 2017 – in which businesses, individuals and larger organisations alike took note of the products and services due to be affected financially in the next few weeks. The Spring Budget is often a good time to get an idea of where taxation is likely to be headed for the next twelve to eighteen months, meaning that the day of release is critical for small businesses, the self-employed and larger corporations. As accountants Stanmore and beyond will advise, the Spring Budget is extremely important for both personal and business record-keeping. But what came to light in this year’s Spring Budget?
The Chancellor advised that, among additional investment in the NHS and in technical education, businesses are set to see some changes to their taxation and the way that they keep their records. Small businesses and landlords will now be required to have all of their financial records made available online via a system called MTD (Make Tax Digital) by April 2019 – providing they oversee a yearly turnover that remains below the VAT threshold. This means that small businesses not currently needing to pay VAT will need to start keeping records via software for HMRC to check. Tax advisors will, therefore, need to prepare for these changes – and what they will need to advise business owners on.
A controversial policy made clear in the Budget stated that National Insurance Contributions for those who are self-employed will increase from 2018. This means that there will be big changes in store for the Class 2 and Class 4 NI system, which currently allows businesses to differentiate in terms of how much they can pay towards contributions each tax year. These changes have been met with some negative feedback, and it is not currently clear how far the plans will progress – in any case, tax advisors will need to keep on their toes to see what happens next.
The tax-free dividend allowance, that which normally affects those who have considerable stocks and shares in an investment, is set to reduce from £5000 to £2000 from 2018 – meaning that things could also change for those involved in direct investment.
In any case, and regardless of how the Spring Budget has affected you, we will ensure that you are up to date on your taxation and that we know exactly how to prepare your business and your income for future changes.