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Budget 2017: Levelling the tax playing field

The Chancellor announced the introduction of measures from April 2018 to tackle the discrepancy between the tax and NIC paid by individuals who are employed, self employed and an employed worker who operates via their own limited company.

From April 2018 self employed workers will see a 1% increase in NIC to 10%. This will apply to profits over about £8,000 up to the higher rate threshold. The rate will increase by a further 1% to 11% in April 2019. The rate of NIC that currently applies to profits over £43,000 will stay at 2%.

From April 2018 the tax free dividend allowance reduces from £5,000 to £2,000 meaning that individuals who operate via their own limited company will pay more tax on the dividends they pay themselves from their company.

These announcements look as if they are the start of measures intended to tackle unfairness between different forms of employment.

If you wish to discuss this in further detail please contact Brian King on 024 7622 1046 or e-mail brian.king@dafferns.com