Budget News
We don’t intend to go into too much detail about the impacts of today’s Budget right now. We are sure that everybody will be aware of the main headlines from media news broadcasts.
We will send a full analysis of the budget changes and how they might impact you on Friday but our editorial comment is that there seems to be very little in this Budget for owners of small and medium size businesses.
The reduction in National Insurance may mean that we require to have fresh look at how business owners extract their profits from their companies, either by remuneration, dividend or interest.
The main headlines are as follows:
- Employees National Insurance to fall from 10% to 8% in the new tax year, following on a 2% earlier already in this year.
- National Insurance for the self-employed will reduce from 8% to 6% in the new tax year.
- The higher rate of Capital Gains Tax on disposal of residential property will reduce from 28% to 24%. This may mean it could be worthwhile delaying exchange of contracts until after 6 April.
- The VAT registration threshold will rise from £85,000 to £90,000. It is something but given that it has been at £85,000 for the last 7 years, has not kept pace with inflation.
- The high income Child Benefit charge is to increase from £50,000 to £60,000 and the level at which it is fully repaid will increase from £60,000 to £80,000. It will be administered on a household rather than on an individual basis by April 2026.
