With effect from 6th April 2016 the way that profit is extracted from Limited Companies is changing.
In particular the previous dividend regime is changing with a new £5,000 allowance being introduced whereby the first £5,000 drawn in dividends will be taxed at 0%.
Above this figure, all dividends will be taxed at 7.5% higher than the current rates. This will be borne by the individual and will therefore have implications for most SMEs and in particular owner managed companies.
It is now a good time to speak to us about how this will affect your Limited company and whether it is still beneficial to be incorporated and to determine the best structure in which to run your business.
It is also expected that the Chancellor will implement a tax free savings interest threshold for individuals of £1,000 per annum from 6th April 2016. This is one of a number of interesting developments which are expected to be confirmed in the Budget on 16th March 2016. We will be keeping on top of this on the day as we look to continue passing on the most up to date advice to our clients