Budget 2017: how it could affect you
Stephanie Tam for
The recent Budget has a significant financial impact on families, businesses and individuals.
The change announced by Chancellor Philip Hammond in the Budget is said to support families in their household finances. It was announced in the Budget that the rate for Class 4 National Insurance Contributions (NICS) would rise from 9% to 10% in April 2018, and to 11% in 2019. As a consequence, increases in NICS rate for those who are self-employed have been criticised as ‘punitive’ and ‘penalising entrepreneurs’.
Among those affected by the rises will be self-employed hairdressers, taxi drivers, construction workers and management consultants. Currently, employees pay at the rate of 12%. Yet some opined that self-employees do not receive the same entitlements and benefits such as holiday and sick leave. Although the increase in the NICS rate will raise £145 million a year for the Treasury in the future, increasing National Insurance rates for the self-employed could be seen as a step to penalise those who are taking risks and starting a business.
For individuals, probate fees will change in May 2017, costing more for large estates. Anyone with an estate worth more than £50,000 will pay considerably more. Those worth between £50,000 and £300,000 will pay £300, with fees rising to a maximum of £20,000 for estate worth more than £2 million.
For businesses, the total amount of dividends that company directors and shareholders can receive tax-free will fall from £5,000 to £2,000 from April 2018. This means that a basic rate tax payment who receives £5,000 in dividends will have to pay an extra £225 tax from April 2018, and a higher rate tax payer will pay an extra £975. Directors, shareholders and businesses owners of private companies who pay themselves in dividends in addition to a small salary will be hit by the change.
If you would like advice from one of our Solicitors to support your businesses moving forward in light of the change announced by the Budget, please feel free to contact us on 0121 245 4610.