From 1st March all vat registered CIS registered companies will be paid net of VAT by their contractors. The vat will be shown as withheld on the invoice. This will have an immediate impact on cashflow but with a VAT rebate likely due, the cashflow should be the same over a quarter. Some larger companies may consider monthly VAT returns if this is a concern.
National Insurance (NI). The Government has announced they are doing a U turn and will NOT scrap self employed Class 2 NI as planned. This is a fixed weekly amount of £2.95 which was collected by direct debit and was due to be scrapped as a tax break for the self employed. It will now continue to be collected via your tax return in addition to self employed Class 4 NI, which is 9% on profits above £8,424. Please note [...]
From April 2018 the National Minimum Wage and National Living Wage is increasing to £7.83 for those above 25, £7.38 for 21-24 year olds, £5.90 18-20 year olds, £4.20 for below 18 and £3.70 for apprentices. Remember it is the employers responsibility to pay all employees at least these rates of pay.
Autumn Budget 2017 today was pretty uneventful. The main news was that Stamp duty for 1st time buyers would be abolished with immediate effect for the first £300,000 of any property. The tax free personal allowance will increase to £11,850 from April 2018, with the 40% tax bracket increasing to £46,350. The Living wage will also increase from £7.50 to £8.83 in April 2018.
Remember that from tax year 2016/17, the personal tax returns being completed now, the way dividends are treated changes. Now the first £5,000 of dividends are tax free, then they are taxed at 7.5% if you are a basic rate tax payer and 32.5% if you are a higher rate tax payer.