April Has Arrived
Once you've had your 'April Fools' fun out of the way this morning, remember that April sees the start of new allowances and rates which impact a lot of companies and businesses...
The first of April brings good news for companies, with Corporation Tax rates cut by 1% to 19%. This applies to Corporation Tax Years starting after 1st April, so if your year end falls later in 2017, it would be a good idea to bring forward any planned expenditure before your next financial year, so that you get tax relief at 20% instead of the new rate of 19%.
The same applies to income, any income that can potentially be deferred and recognised in your next tax year would be taxed at the new lower rate, so it is worth giving end of year tax planning some additional thought this year. Get in touch if you want to discuss this further.
Last Minute Dividends
As mentioned in previous posts, the clock is ticking before your £5,000 0% Dividend Allowance is reset for another year on 6 April. Make sure you assess whether there is sufficient profit to declare a dividend for shareholders before the 5th April. You should also ensure that this is recorded properly in case it is challenged by HMRC.
The 6th of April also brings in new Personal Allowance and Higher Rate Thresholds for 2017/18. The Personal Allowance will increase to £11,500 while the Higher Rate Threshold increases to £45,000. National Insurance Thresholds have also increased for 2017/18, so it is the perfect time to assess remuneration plans for directors who receive a mix of salary and dividends, to ensure you are maximising your tax savings.
For all employers, remember that the Minimum Wage and Living Wage increased on 1 April 2017. Make sure that you are paying the new rates to your employees from this month to ensure that you are not breaking the law.
A summary of the new rates can be found below, or click here for full details:
£7.20 (£7.50 from 1 April 2017) if you're over 25
£6.95 (£7.05 from 1 April 2017) if you're 21-24
£5.55 (£5.60 from 1 April 2017) if you're 18-20
£4 (£4.05 from 1 April 2017) if you're under 18
£3.40 (£3.50 from 1 April 2017) if you're an apprentice