Forgot Password?
Not Register Yet? Register Here

Budget 2015 for UK Contractors

        1514 views

With the elections drawing closer, it was anticipated that the recent budget was going to contain relevant, and perhaps controversial, plans for the business world. In the interests of our clients, we looked at the aforementioned plans with some scrutiny to decipher what would be of most interest to the hard working world of the self-employed.

One major issue being raised is the effectiveness of the current personal allowance limit. Currently set at £10,000 this allowance acts as a tax waiver; only the earnings made over this limit are taxable. In his budget the Chancellor plans for this to increase to £10,800 next year, with an eventual ambition for it to sit at £12,500. In our opinion, and while this is beneficial for all tax payers, it does not resemble significance when looked at individually.

Being so close to the general elections was always going to result in ambiguous claims by the current Government, and the media has not failed to pick up on the Chancellor’s “plans” for a future Britain. What we really need to know is exactly how so many of these promising figures are going to benefit us in the long term.

Many of our clients incur the higher rate of tax, so we always looked at this. The Chancellor plans to increase the 40p rate to £43,300 in 2017-18, with the eventual rate being more like £50,000. So although this is good news for many of our clients, objectively speaking it is just another figure promised for a time when the Government will be in the middle of their term. We always advise clients that while promises of a brighter future can draw flies to the light, those that financially survive different governments and differing economical climates are those that seek professional advice and plan thoroughly for their own future.

While the corporation tax is said to be reduced to 20%, it seems to us that the majority of contractors working through their own companies will not be affected, as the average rate for such a company is 20%.

Key planning is essential. Ultimately, it is your money and your life and what you choose to do is, for obvious reasons, completely up to you. However, the savvier individual is often the one who doesn’t solely focus on the promise of a brighter future but one who appreciates the context in which those promises and statistics were released.

 

Source: taxes.co.uk

Latest Posts

Harry Taylor

Harry helps clients by demonstrating a working knowledge of accounting services and taxation liabilities and understanding and appreciating the needs of business owners, directors and self-employed contractors. His role varies from client consultations to coaching the team, and he is always happy to meet and chat on an individual basis at the client’s convenience

View All Posts from Harry Taylor
About Us

Contractor Daily is an information and news portal for UK Contractors and Freelancers. Besides news and information, we would be also providing services like Contractor Accounting, Mortgages, Insurance, Tax Planning, IR35 Review and other related services.

Copyright 2017. All content copyrighted by ContractorDaily.com Website Design by ThinkWeb Solutions
We have updated our cookie policy to reflect new guidelines.