It is already 2017! Most of us will be thinking what this year will bring to us. We don’t have all the answers but we definitely do know about accounts and tax. Here are some of the most important tax changes that 2017 bring to us:
This change from £10,600 to £11,000 is one to be celebrated for many. To add to the good news, a rise to £11,500 will come the following tax year. From 6th April the amount of money an individual can earn before incurring Income Tax (aca the Personal Allowance) will rise to £11,500 in April 2017.
Income Tax Higher Rate Increase
Another small change to look at is the amount of money you earn before having to pay the high rate income tax of 40% increases from £42,385 to£43,000. And by April 2017 it will rise to £45,000.
Tax changes on Savings
Personal Savings Allowance is introduced for the 2016/17 tax year, so those who pay basic rate tax (earning less than £43,000 a year) will not have any tax charged on the first £1000 of savings interest. Higher rates payers are still entitled to the new scheme, but from them the threshold is £500.
The Chancellor also announced in 2016 Budget the new Lifetime ISAs that allow people under 40 years old to save up to £4,000 annually and receive a 25% on top from the Government.
ISA limit will also rise to £20,000.
These announcements will go live in April 2017.
VAT Registration Threshold
Not new for 2017 but worth to mention VAT Registration threshold of £83,000 from April 1st
Business relief from 1st April 2017:
Small Business Rate Relief from 50% to 100%.
Business with property rateable up to £12,000 will receive 100% relief.
From £15,000 to £12,000 will receive tapered relief.
Increase threshold for the standard business rates multiplier to a rateable value of £51,000. This will reduce business rates for many small businesses.
By claiming the Employment Allowance the employers can reduce their National Insurance Contributions increase to £3,000
National Insurance Contributions
Employees earning more from £155 to £825 a week and under Class 1 National Insurance Category letter A will pay 12% rate.
New Increase in National Living Wage
The Government has increased the minimum wage to £7.20 for over 25’s and on April 2017 will rise to £7.50 per hour.
Dividend tax allowance
A new dividend tax allowance will affect all individuals in receipt of dividends. Dividend tax credit rules is replaced with a tax free allowance. This tax changes entitles all individuals to the first £5,000 of income from dividends each year to be tax free. Dividends over £5,000 will be subject to taxation for basic rate taxpayers of 7.5% or 32.5% for higher rate taxpayers.
Tax free childcare scheme
It will be introduced early 2017. Working parents will be able to get up to £2,000 annual per child, in tax relief to help cover childcare costs. It replaces the “childcare vouchers” systems that enable to pay for childcare worth up to £243 a month.
If you are still using “childcare vouchers” systems, you don’t need to move to Tax free childcare. But if you move to new system, you can’t go back again
What to do if you want to be on top of tax advice and news?
To find out more: if you need more help with tax, or any other aspect of your finances, savings, accountancy, contact us to get individual help. Give us a call on 07478 645331 or send us an email to firstname.lastname@example.org or if you prefer you can visit our office in Southall, London.