Walker Thompson

RISE IN NUMBER OF TOP LEVEL TAXPAYERS

The number of higher rate taxpayers (paying at the 40% & 45% rates) is now 1 in every 6 compared with 20 years ago when 1 in 12 taxpayers paid at the higher rate.

According to HMRC nearly 5 million taxpayers pay some tax at the higher level.

Commentators are viewing this as a stealth tax by the back door as the income level at which 40% tax starts has not risen in line with general earnings.

MINIMUM WAGE INCREASE

More than 2 million employees will receive an automatic pay rise this week as minimum wage levels increase. 

Employers need to ensure that they make the necessary payroll adjustments for anyone earning at or around the appropriate levels.

TAX FREE DIVIDEND ALLOWANCE REDUCES

A brief reminder that the tax free allowance applicable to dividends reduces from £5,000 to £2,000 on 6 April 2018. 

Cash extraction from SME’s will therefore be squeezed even tighter and Director Shareholders may need to seek out other routes eg; pension schemes in order to balance out the best approach.