April 2016 Articles

National living wage: A guide for business owners

New National Minimum Wage regulations will take effect on April 1st and all employers will be required to meet them.

The National Living Wage will apply to employees aged 25 and over and it will essentially mean that employers will have to pay their staff an extra 50 pence per hour, with the rate set at £7.20.

The requirement could put many small and medium sized business owners in a difficult position, particularly if they operate in the margin-conscious retail sector or employ a lot of minimum wage employees.

Changes to accommodation expenses rules coming in April 2016

Like other travel and subsistence reliefs, the rules for claiming accommodation expenses are changing from April 2016.

In the new tax year, contractors who have been ‘caught out’ by HMRC’s new tax rules will not be able to offset their accommodation expenses against their income, which could result in thousands of contractors paying more in tax.  

Previously, the contracting community was concerned that these changes would affect everybody working through an umbrella or personal service company (PSC). 

The way that dividend income is taxed for company owners is changing in April. The abolition of the Dividend Tax Credit and the introduction of a tax-free Dividend Allowance will have positive or negative consequences depending on your situation.

It is important that you are aware of – and prepared for – the upcoming changes.

For many small and medium sized company owners, receiving dividends tends to be a more tax efficient means of income than receiving a salary. But this advantage will reduce after April.