Changes to Self-Employed Tax Rates in 2017
Tax changes in 2017? If you are self-employed you should be expecting changes to tax rates! A Glasgow accountant from The Kelvin Partnership, specialising in small business accountancy, will be able to give you guidance through the changes.
The lifetime ISA launched in April 2017. Lifetime ISA (LISA) let’s you put up to £4,000 into it every year – tax free. It can be either cash savings or stocks and shares investing. Allowing you to get interest in savings or share growth in stock and shares investing. Also, it is specifically designed for first time buyers to use for a deposit or for later life savings. You must be between 18 and 40 to open a Lifetime ISA!
Personal Allowance Increase
From April, the personal allowance increased from £11,000 to £11,500. A personal allowance is the amount of income each individual is entitled to receive each year which is free of tax.
“The launch of the LISA (Lifetime ISA) on 6 April 2017 was a damp squib – with few providers offering them. Yet don’t ignore it, as £1,000 of annual free cash is not to be sneezed at, and for first-time buyers delay could cost. It’s similar for retirement savings – but whether it beats a pension is a much trickier conversation.”
Martin Lewis (founder) – moneysavingexpert.com
Inheritance Tax Scheme
Also in April, a new inheritance tax breaks scheme came into effect. This scheme is going to be phased in over the next three years! The first phase is a new family tax allowance will rise £25,000 a year until 2020, when it will reach £175,000. This is in addition to the existing £325,000 tax exemption. However, this change will not be available to those without children and to some business owners!
Change to Dividend Allowances
The dividend allowance is being reduced considerably in 2018, this will affect self-employed people. At the moment the dividend allowance is £5,000 – meaning that the first £5,000 paid in dividends is tax free. However, from next year, £5,000 is being decreased to £2,000. If you are worried about this change, small business accountancy experts from The Kelvin Partnership will work with you to solve any problems which have come about as a result of this change. Also, when it comes to keeping in know with financial matters and gaining valuable advice, it is important to hire a good business accountant. Look at our last post for more information if you are unsure about whether to hire an accountant!
If you are struggling to keep up with any changes in tax, The Kelvin Partnership specialise in small business accountancy! Don’t hesitate to get in touch if you need business advice and support.