5 Big Juicy Tax Changes You Need to Know About Now!

The 2015 Budget will not put the hard work and sacrifice of the British people at risk, and this is why it is a Budget for the working people and company growth. The only way to build a strong infrastructure and fulfil those big ambitions is to put the investments and efforts in the right direction. This article is about the 5 Big Juicy Tax Changes that could affect your tax return.

In a rush?

I get that reading about ‘tax’ is not the most exciting thing for many!

So I’ve added a simple ‘Tax Twerk Rating’ which sums up each area in 2 words or less:

*’Really good’ = tax savings, more money, more time, long-term wealth

*’Nah’ = paying more tax, no increase in wealth, wasted time

1) The Economy

The Office for Budget Responsibility projects GDP growth from 2.3pc per year to 2.4pc per year from 2017 to 2020. Over 1 m jobs are predicted by the OBR, as there are plans to target full employment. Pay growth is expected to accelerate to 4.4pc in 2020 and the wages should also pick up.

Tax Twerk Rating: Really good, or nah?

Really good!

2) Income Tax

In coming weeks, the main rates of income tax will get checked by a tax lock or VAT for five years. The Tax-free personal allowance will get increased to £11,000 next year, and the target is set for £12,500. Keeping the minimum wage, the threshold will also rise and is expected to reach £43,000 in 2016-17, with a target set for £50,000. Thus, about 29m people will be paying less tax.

Tax Twerk Rating: Really good, or nah?

Really good!

3) Corporation tax

Corporation tax cut is expected to go down to 18pc from 2020, and this was way down from 28pc in 2010. Britain is open for business as the small firms’ NI contributions fall with an employment allowance of £3,000. The annual investment will be set permanently at £200,000 from January 2016.

Tax Twerk Rating: Really good, or nah?

Really good!

4) Buy to Let Private Landlords

Buy to let landlords will receive lower tax relief on their mortgage interest payments. The tax relief for private landlords will be going down from 40pc or 45pc to 20pc by April 2020. There is going to be an extra £175,000 inheritance tax payment from 2017 for those who move on to live with their children
and leave their homes. This is extra from the current £325,000 standard inheritance tax budget.

Tax Twerk Rating: Really good, or nah?

Nah!

However, there is a solution for private landlords.

Click here to read how you can save tax by setting up a limited company for your rental income

5) Dividends

Dividend tax credits will be substituted by a new £5,000 tax-free dividend allowance. However, the dividend tax rates will rise from zero to 7.5pc for the basic rate income tax payers, from 30.56pc to 38.1pc for additional ratepayers and from 25pc to 32.5pc for higher bracket taxpayers.

Tax Twerk Rating: Really good, or nah? 

Nah!

BUT… if you’re thinking of paying yourself in dividends don’t worry. The directors of limited companies will still potentially save a lot on tax payments and paying yourself properly.

Get in touch today to find out how we can help you on saving tax and saving your time! 

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