Personal Allowance – the personal tax free allowance for UK residents will increase to £11,500 from 6th April 2017.
Higher Rate Threshold – Scottish residents will have a higher tax rate threshold of £43,000, £2000 lower than the rest of the UK.
Two New Allowances – ‘the Trading and Property Income Allowances’ are £1000 each and can be deducted from sole trader income and rental property income in place of actual expenses. These will be available from 6th April 2017.
Dividend Allowance Reductions – the tax free dividend allowance which was introduced in April 2016 will be reduced from £5000 to £2000 from the 6th April 2018.
Class 2 NIC will be abolished from April 2018 but this will now be coupled with an increase in Class 4 to 10% in 2018 and 11% in 2019. This is intended to reduce the gap between employed and self-employed. There are thresholds in place for those with low profits, where contributions are not required and there is an upper threshold where contributions cease.
Making Tax Digital
Quarterly reporting for unincorporated businesses with turnover below the VAT threshold will be postponed until April 2019.
Corporation Tax will be reduced to 19% from April 2017.
From 1st April 2017 the VAT threshold will increase to £85,000. The deregistration threshold has been increased to £83,000.
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