Well, with Brexit looming and the population on tenterhooks about what might or might-not happen, the chancellor has opted for a conciliatory approach to try to win tax payers over. The main points of interest for small business owners are:
- The personal allowance threshold, the rate at which people start paying income tax at 20%, will rise from £11,850 to £12,500 in April 2019 – for Owner/ directors of their own limited companies running their own payrolls, this means your monthly most tax efficient salary will increase to £1,040 from April 19 onwards
- The higher rate income tax threshold, the point at which people start paying tax at 40% will rise from £46,350 to £50,000 in April 2019 – which means a potential tax saving of £730 for the year
- Increase in the National living wage will increase from £7.83 to £8.21 – We recommend you rework the wages you pay your staff to ensure you meet these new obligations. This may also impact the workplace pension obligations if this now results in your worker being paid in excess of £10,000 pa
- To promote business investment, the Annual Investment Allowance is being increased from £200K up to £1M and you will receive tax relief on capital amounts invested in your business
- To promote the employment of apprentices, the small company’s apprenticeship levy is being reduced from 10% down to 5% – so if you are considering employing apprentices, now is the time to do so
- Business rates bill for firms with a rateable value of £51,000 or less will be cut by third over two years – this will benefit all small business owners with premises currently paying business rates.
- A new tax on plastic packaging could impact any business that uses injection moulding, cling film and plastic food coverings etc
If you think any element of the new budget might impact you and you’d like to find out how, then please get in touch with us.