Posted On Tuesday 28th March 2017 10:40 AM
Personal Allowance Increase :
This April will see the personal allowance increase to £11,500 and the higher rate income tax threshold to £45,000. The Treasury says this means the amount someone can earn tax-free in 2017-18 will be over 75 per cent higher than in 2010.
How will this affect me? This is good news for employees of SMEs, as they will take home more of their monthly salary than in the previous tax year. Businesses will need to ensure they have the correct tax code for their employees.
National Living Wage :
Keeping in line with Philip Hammond’s Autumn Statement pledge, the National Living Wage is set to rise to £7.50 an hour from April 2017.
How will this affect me? SMEs will need to ensure they are paying all employees the correct new hourly wage from 6 April 2017.
Cash Basis of Accounting for Trading Income :
From April 2017 the entry threshold for the cash basis will increase from £83,000 to £150,000.
How will this affect me? The measure will increase the cash basis entry threshold to give more SMEs the choice to benefit from the cash basis simplification, which is an optional and simplified method for calculating taxable profits for trading businesses with straightforward tax affairs.
Productivity Puzzle :
The Spring Budget saw the allocation of funds targeted at improving infrastructure – both physical and digital. The Chancellor announced transport spending of £90m for the north of England, £23m for the Midlands to address pinch points on roads, £16m for 5G mobile technology and £200m for local broadband networks.
How will this affect me? SMEs have long been plagued by bad broadband connections and poor road networks, both hampering a business’ productivity. The allocation of these funds should improve digital and physical infrastructure for SMEs all over the UK.
Corporation Tax :
Corporation tax is set to fall from 20 per cent to 19 per cent this year, and again to 17 per cent in 2020. Based on legislated plans, the UK will have the lowest corporation tax rate in the G20.
How will this affect me? As a business owner, you will be paying less in corporation tax than the previous tax year.
Business Rates :
For businesses subjected to the increased in business rates from April 2017, there is some relief in the form of £435 million to support businesses affected by the business rates relief revaluation. Funding for local authorities will allow them to provide £300m of discretionary relief to deliver help to businesses most affected by the revaluation. From April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.
How will this affect me? No small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016-17.
Making Tax Digital :
The introduction of Making Tax Digital for UK businesses that have a turnover below the VAT threshold, which will rise from £83,000 to £85,000 in April 2017, will be deferred by a year to April 2019.
How will this affect me? Smaller businesses will be given more time to plan and prepare for the new digital reporting requirements. Additionally, software providers will be allocated more time to prepare their products to help businesses record and submit digital tax reports.
Clive Lewis, ICAEW Head of Enterprise, said, “The problem of growing regulatory burdens for businesses, particularly small ones, is still prevalent. It’s important that small businesses are aware of the changes this coming tax year and beyond. With the day-to-day running of a business being so time-consuming, SME owners should ensure that they are on top of all modifications and do not leave preparation until the last minute.”
source <> http://www.bmmagazine.co.uk/news/7-things-new-tax-year-bring-smes/