Proposed Tax Changes affecting Umbrella Company Workers
The Chancellor in his Autumn Statement that was delivered yesterday proposed the following tax changes that will affect contractors working through an umbrella company.
A summary of the changes are:
1. An increase in the personal allowance by £235 in April 2013, increasing it to £9,440. Therefore you can earn slightly more without paying any tax.
2. Good news for contractors who drive in their own car to assignments because the Government have agreed to cancel the 3.02 pence per litre fuel duty increase that was to introduced 1st January 2013. The 2013-14 increase will be also deferred to 1st September 2013.
3. An increase in the higher rate threshold for income tax by 1 per cent in 2014-15 and 2015-16.
Other changes of interest:
The capital gains annual exempt amount will increase by 1 per cent each year over the same period.
The inheritance tax nil-rate band has been frozen since 2009 at £325,000, but will increase by 1 percent in 2015-16.