Autumn Statement Update
Listed Under: Blog
George, what about the…..
Much has been reported on the Government’s surprise decision to U-turn on cuts to tax credits in the Autumn Statement. But what about George’s other policies from the summer budget 2015? Here’s a couple likely to affect businesses in the next tax year:
- The new dividend tax is still set to apply from 6th April 2016, which will affect business owners that take their remuneration as a small salary topped up with dividends. Individuals will be given a £5,000 dividend tax allowance and the 10% dividend tax credit will be abolished. Dividend income in excess of this allowance will be taxed at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. Timing of dividend payments could be key to minimising tax bills; a dividend paid before 5 April 2016 should avoid the new surcharge.
- Tax relief on travel and subsistence expenses will be restricted from 6th April 2016. The government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. This could potentially have a significant impact on subcontractors that receive remuneration through their company, as the Government seeks to put them on an even footing with directly employed individuals. We await draft legislation to be published on 9th December 2015.