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A cut in dividend allowance will cost some contractors more than £1,000 per year when it takes effect from April.
The allowance on dividends will be cut from £5,000 to £2,000 as the chancellor continues his raid on self-employed finances.
This means that individuals will not pay taxes on the first £2,000 of dividend income, regardless of what non-dividend income they have.
Please find below the key tax changes that came into effect on 6th April 2015.
Employee National Insurance Contributions (NIC) Threshold (rate above which your start paying at rate of 12%)
£153 to £155 pw (per week)
Or if monthly paid
£663 to £672 pm (per month)
Yesterday we highlighted the key changes to the amounts of personal taxation and national insurance contractors will pay due to changes that come into force for the new tax year (started 6th April 2015).
One of the changes that dictates how much many contractors will pay themselves as wages when working through their own Personal Service Company (PSC) is that employees national insurance now starts at a lower amount than employers national insurance (but up from the £153 in the prior tax year).
The Chancellor in his Autumn Statement that was delivered yesterday proposed the following tax changes that will affect contractors working through an umbrella company.
