Dividends Articles

National Insurance Tax Increase
marketing | 10 September 2021
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The tax increase has been created by the Government to combat the NHS backlog. It will also fund social care initiatives, such as care home costs and disease prevention.

From April 2022, National Insurances contributions will rise by 1.25% for employees and the self-employed who earn over the minimum threshold. Employers NI contributions will also be increased by 1.25%.

The increase to NI contributions will only last 1 year, with rates returning to the current level in April 2023. However, the 1.25% tax is here to stay and will be known as the ‘Health and Social Care Levy’ from 2023.

Things to do before the end of the tax year
marketing | 29 March 2018
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For many contractors, a new personal tax year starts on April 6th. There are some important things that you can do now to minimise the amount of tax you owe and to make the process of paying taxes simpler.

 

Maximise your dividends

Dividend Tax is changing from April 2016 so now is the time to plan if proposing additional dividends in March 2016 could save you money.

From April, dividend tax credits will be abolished and a new taxation method brought in starting at 7.5% on all dividends over £5,000. Currently basic rate tax payers have no additional tax to pay on dividends received.

For higher rate tax payers the effective rate will rise from 25% to 32.5%. For additional rate tax payers the effective rate rises from 30.6% to 38.1%.

This means that in most cases there will be a rise in personal tax for contractors drawing dividends through a limited company and tax. 

Autumn Budget Could Cost Contractors

Reports suggest that the Chancellor Rishi Sunak could increase limited company contractor taxes to help reduce Britain’s COVID-19 debt.

The Autumn Statement isn’t expected until mid-to-late November at the earliest, but the rumour mill is already beginning to swirl - and tax hikes for companies and contractors look to be on top of the Chancellor’s agenda.

What should contractors pay themselves?
marketing | 16 September 2017
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Contractor pay is important to us. Many contractors work long hours and have to perform a lot of additional administration that isn’t involved in other lines of work. So it is important that the financial rewards match the burdens of the job.

Unfortunately, the tax framework for contractors is something of a minefield. Recognising the most efficient way to draw income from your contracts is far from simple.

Between umbrella contracting, dividends and IR35 legislation, it can be difficult to know the best way of doing things. We hope to clear it up in this blog post.