A reminder to small business owners of upcoming changes from April 2017

28th February 2017

There are a number of changes coming into effect from April 2017, which business owners need to be aware of.

Salary Sacrifice:

This allows employees to swap their salary for certain non-cash benefits, which results in a lower salary and therefore a lower tax and national insurance liability. While the pensions, childcare vouchers and bicycles in the Cycle to Work scheme will continue, from April 2017 computers, mobile phone, gym memberships and health screenings, will no longer be tax free benefits.

National Living Wage:  

For employees 25 years or over, the National Living Wage is increasing from £7.20 per hour to £7.50 per hour.

Income tax bands:

  • Personal allowance: £11,500
  • Basic Rate band: £0 - £33,500 / 20%
  • Higher Rate band: £33,501 - £150,000 / 40%
  • Additional Rate band: Over £150,000 / 45% 

For every £2 of income above £100,000, an individual will lose £1 of their personal allowance.

National Insurance:

The weekly Primary Threshold is increasing to £157. Business owners remunerating themselves in the structure of small salary, plus dividends, can receive a salary of up to £8,164 for 2017/18 without deductions. They will continue to receive their annual credit towards their state pension in this situation. 

Corporation tax:

From April 2017 the rate of corporation tax is reducing to 19%. The current proposals are for this to fall to 17% by April 2020.

If you would like to discuss your position in more detail, please contact your adviser.

Luke Thomas | Plus Accounting | Brighton

Luke Thomas, Director - Blog Author 

Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. 

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