Budget

[dave1]

What's everyone think.

One man band ltd company here how should it effect me.

 

[ched999uk]

Maybe a bit more employers National Insurance, increase in non draught alcohol, increase in duty on tobacco products. Higher minimum wage, if you where using dividends might change tax a little.
Capitol gains tax and inheritance changes.
Other than that nothing really

 

[dave1]

Time to start offering discount for cash payments then

 

[Part Timer]

It makes staying self employed much more sense. Employers NI starting at £5k is crazy.amd will mean small companies will probably get rid of any staff that's not fully employed.
Staff earning £30k a year now costs the employer an extra £900 a year

 

[dave1]

So basically we should all get some ******** and all agree not to pay tax bills till they start working for us and not against

 

[Iron Giant]

It makes staying self employed much more sense. Employers NI starting at £5k is crazy.amd will mean small companies will probably get rid of any staff that's not fully employed.
Staff earning £30k a year now costs the employer an extra £900 a year

I think this would depend on the company, my wife works as a cleaner under 20hrs a week for a franchisee, most of lasses do around a 20hr week Mon-Thur as they don't work Fridays

 

[Part Timer]

I think this would depend on the company, my wife works as a cleaner under 20hrs a week for a franchisee, most of lasses do around a 20hr week Mon-Thur as they don't work Fridays

So earning cica £13k a year, now costing her employer an additional £700 a year in NI
The lower the salary the higher the percentage rise, now multiply.that by 10 part time workers. More will be made to work full time and less part time employees

 

[dazmond]

It will cost my brother a lot more money in employees NI alone....he ll probably have to get rid of some staff

 

[dazmond]

The budget won't directly affect me at all as a part time sole trader..

I don't drink or smoke and I'm glad Rachel Reeves left ISAs alone!

 

[Iron Giant]

So earning cica £13k a year, now costing her employer an additional £700 a year in NI
The lower the salary the higher the percentage rise, now multiply.that by 10 part time workers. More will be made to work full time and less part time employees

Part time employees is part of their business model, only ones that do full-time are the lasses covering extra jobs when people are off sick, holidays or someone has left so they have pick up other jobs.

7k could easily be recouped by price increases, it's a Franchise that has been going well over 15 years I think, also it operates across England so no doubt they have weathered things like this before.

 

[ched999uk]

More will be made to work full time and less part time employees

I wonder if that was the hidden plan? Almost to try and make employers take on staff for longer hours and less zero hrs contracts.
No sure that will help the benefits bill as less part time jobs being available could make the bill bigger?

I get why they increased employers NI from 13.8 to 15% but also lowering the threshold to £5K seems a bit mad for employment.

They boxed themselves into no employee tax rises in their manifesto - they had to work out some way to increase their income.

I'm not really sure how any of the budget is supposed to help with growth as it was all taxing employers, inheritance tax (farmers hit badly), Capital Gains, they using the money to improve NHS (it needs it, but not more managers), and build new schools - very long term improvements in education. So where is the mechanisms to boost growth?

I'm not having a pop at the current gov as I believe they are all lying bar stewards - they are the only people who can advertise their 'services' and not be held accountable in the future - they passed this law!

 

[Iron Giant]

This Gov didn't want to be seen as directly hitting employees in the pocket, so they have done it another way hit employers who are seen as rich they then increase costs which gets passed on down the chain and the cost of most things increase and the employees take a hit as well, how this all plays out remains to be seen in the coming weeks and months.

 

[Part Timer]

I think this would depend on the company, my wife works as a cleaner under 20hrs a week for a franchisee, most of lasses do around a 20hr week Mon-Thur as they don't work Fridays

It roughly works out as 1 employee on 40 hours a week will cost the company an additional £850 a year in NI If you then have 2 x 20 hour per week employees, this will cost an additional, combined, £1350 a year. So therefore 2 part time workers will cost an additional £500 a year, multiply that by a few thousand of agency staff then it gets very expensive.

 

[Dodotop]

What's everyone think.

One man band ltd company here how should it effect me.

Im in a similar position being LTD, on the advice of my accountant I've always paid myself under the threshold as I've been able to do so to this point. If I left it as is for next tax year then that would be £615 extra tax if my calculations are correct, so will have to talk to the missus and see whats best.

Since I went limited a couple of years ago the corp tax rate has gone up and now this, at times almost feels like it would be better to slow down, go part time and back to sole-trader. Maybe Im just in that in-between spot though and if I kept grafting and increasing turnover then it would pay off down the line.

 

[Part Timer]

Im in a similar position being LTD, on the advice of my accountant I've always paid myself under the threshold as I've been able to do so to this point. If I left it as is for next tax year then that would be £615 extra tax if my calculations are correct, so will have to talk to the missus and see whats best.

Since I went limited a couple of years ago the corp tax rate has gone up and now this, at times almost feels like it would be better to slow down, go part time and back to sole-trader. Maybe Im just in that in-between spot though and if I kept grafting and increasing turnover then it would pay off down the line.

Why not pay yourself, currently £758 a month, dropping to £416 in April, and give yourself a quarterly dividend. Ask your Accountant but fairly certain that's what we will be doing.

 

[ched999uk]

Why not pay yourself, currently £758 a month, dropping to £416 in April, and give yourself a quarterly dividend. Ask your Accountant but fairly certain that's what we will be doing.

Are you not paying yourself under the minimum wage? Not that I have seen anywhere to write the number of hours worked on a tax return!

Then again if you pay yourself £4992 a year (£416 a month) you will be paying 8.5% dividend tax on £7,578 = £644, where as if you paid yourself £12,570 you would still pay no income tax but £615 in National Insurance!

I think there is a small business Employment Allowance (Nat Ins bill less than £100K) where you can claim back upto £5K in Nat Ins payments. So paying yourself £12570 might actually be a better plan.

Definitely one for an accountant!

 

[Part Timer]

Are you not paying yourself under the minimum wage? Not that I have seen anywhere to write the number of hours worked on a tax return!

Then again if you pay yourself £4992 a year (£416 a month) you will be paying 8.5% dividend tax on £7,578 = £644, where as if you paid yourself £12,570 you would still pay no income tax but £615 in National Insurance!

I think there is a small business Employment Allowance (Nat Ins bill less than £100K) where you can claim back upto £5K in Nat Ins payments. So paying yourself £12570 might actually be a better plan.

Definitely one for an accountant!

That's why I said ask the Accountant. Total income below threshold is tax free, be it wage or dividend as far as I know.
I do as my Accountant tells me so he'll have worked the best, tax wise, way

 

[Part Timer]

I'm not really sure how any of the budget is supposed to help with growth as it was all taxing employers, inheritance tax (farmers hit badly), Capital Gains, they using the money to improve NHS (it needs it, but not more managers), and build new schools - very long term improvements in education. So where is the mechanisms to boost growth?

Well the stock market has dropped 3% and the GBP 2% since the Budget rumours and delivery, so the money men don't think it's going to help

 

[Iron Giant]

It roughly works out as 1 employee on 40 hours a week will cost the company an additional £850 a year in NI If you then have 2 x 20 hour per week employees, this will cost an additional, combined, £1350 a year. So therefore 2 part time workers will cost an additional £500 a year, multiply that by a few thousand of agency staff then it gets very expensive.

Worst case scenario for my wife is she works more hours .

I think it's possible my wifes employer and the other franchisee's are going to get whacked big time, the lasses typically have 2-3 clients a day on 2hr calls as a minimum for each client that's about as much as possible to cover with travel time as not all jobs are in the same towns or villages.

Not a chance any of them could cover 20 jobs totalling 40hrs over 4 days, typically clients don't want cleaners turning up till 8.45am and no doubt they don't want a cleaner there at 4pm or after.

I was listening to radio 2 today and one big business owner said he is looking at an extra £1 million to pay to HMRC from next year

 

[Iron Giant]

Well the stock market has dropped 3% and the GBP 2% since the Budget rumours and delivery, so the money men don't think it's going to help

I've seen a decent drop today on my shares, I expected a hit with the budget only time will tell

 

[Part Timer]

Are you not paying yourself under the minimum wage? Not that I have seen anywhere to write the number of hours worked on a tax return!

Then again if you pay yourself £4992 a year (£416 a month) you will be paying 8.5% dividend tax on £7,578 = £644, where as if you paid yourself £12,570 you would still pay no income tax but £615 in National Insurance!

I think there is a small business Employment Allowance (Nat Ins bill less than £100K) where you can claim back upto £5K in Nat Ins payments. So paying yourself £12570 might actually be a better plan.

Definitely one for an accountant!

Got this reply from my Accountant when I asked if we need to drop our wage to £416

Had ya hosses. Let us digest everything first. Probably not as the companies receive an employment allowance of £10,500 each which pays for employers NIC most small businesses are better off because of the budget because of this. Leave them for the time being and we will advise in due course.