We are weeks away from the beginning of another new tax year and there are a number of changes for business owners and individuals to be aware of for the new year.
The first of these is that the tax free personal allowance for individuals will increase from the 6th April 2019 to £12,500 per year which is a £650 increase on the current threshold of £11,850.
In addition to this the higher rate tax bracket is also increasing from this date and this will rise to a nice round sum of £50,000 per year from its current level of £46,350.
Other changes involve National Insurance and individuals will be able in the new tax year to earn £166 per week before any National Insurance is paid. This works out at £719.33 per month.
The Capital Gains Tax threshold will increase to £12,000 per year. We would always advise that individuals who are likely to make a capital gain seek professional advice before selling their asset as there are further strategies available to minimise or even eliminate the tax that would need to be paid.
The Corporation Tax rate will remain at 19% as from the 1st April 2019 although this is currently scheduled to drop to 17% on the 1st April 2020.
Individuals will be able to earn £2,000 in dividends before paying dividend tax in the year and this will remain at a rate of 7.5% for basic rate taxpayers and 32.5% for higher rate taxpayers.
The VAT registration threshold will remain at £85,000 per year , with the de-registration limit also remaining the same at £83,000 per year. The full VAT rate will also remain at 20%.
This covers most of the changes that most business owners like to find out as a new tax year begins although there are many more changes in other areas of course. If you would like to discuss if any other changes are likely to effect you then please feel free to get in touch.
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