Following the negative changes impacting contractors and freelancers in the Summer Budget, we have pulled together some of the more positive tax changes that have been proposed. Although contractors have been hit hard, the Summer Finance Bill includes actions taken by the government to ensure that other individuals keep a greater amount of the salary they have tirelessly worked hard to earn. Key considerations in the bill include:
- Proposing to rule out increases in income tax rates and VAT for the duration of this Parliament.
- Increasing Personal Allowance to £11,000 in 2016-17 and £11,200 in 2017-18 giving a typical basic rate taxpayer an extra £120 back in their pocket in 2017-18.
- Increasing the point at which you pay the higher 40p rate of tax to £43,000 in 2016-17 and £43,300 in 2017-18.
- Increasing the effective Inheritance Tax threshold for married couples and civil partners to £1 million in 2020-21.
Furthermore, The Bill also provides evidence to the government’s alleged commitment to a fair and competitive tax regime that supports investment and increases productivity nationally. The Bill also contains key policies such as:
- Reducing the corporation tax rate to 19% in 2017 and also to 18% in 2020 which will benefit over 1.1 million companies.
- Setting the Annual Investment Allowance at the fixed higher level of £200,000 for the rest of the Parliament.
Finally, the Bill will secure the UK’s economic recovery by:
- Addressing issues with tax evasion, avoidance, tax planning and increasing tax compliance.
- Ensuring banks pay a share of tax by introducing a new 8% tax on banking sector profits from January 2016.
Financial Secretary to the Treasury, David Gauke commented:
“The legislation published today builds on our efforts to create a stable tax system that supports our long-term economic plan.”
Here at Gorilla, we believe that everybody should retain as much of their hard earned money as possible, that’s why we offer an all-inclusive accountancy package to contractors and freelancers for just £85 + VAT. In addition, we advise on tax efficiency using real time data via our cloud accounting software. Interested? Call us on 0330 024 0406.