Reply to: Budget Update

[SackmanandCo]

I dont think the review of IR35 will mean lower taxes. Speculation continues that NIC could be charged on dividemds!!

[maxima]

Yeah.. I just realised myself that it was rubbish what I said

[lje]

can anyone explain how increasing of CGT gives anyone extra?

Most of IT contractors use schema: min salary + max dividends. may be I am missing something but CGT is taken from dividends so we are going to lose 10% more or what? CGT was 18%...

I believe that they meant the reduction in corporation tax.

CGT is not taken from dividends. CGT is only payable when you sell an asset. It normally is not important for contractors although you may use the enterpreneur's allowance when shutting the company.

[maxima]

CGT reduction probably gives me an extra £700

can anyone explain how increasing of CGT gives anyone extra?

Most of IT contractors use schema: min salary + max dividends. may be I am missing something but CGT is taken from dividends so we are going to lose 10% more or what? CGT was 18%...

[Fred Bloggs]

what do people think the outcome of the IR35 review will be?

Much higher tax for all contractors. 100% certain.

[Sausage Surprise]

Flat rate for IT contractors up to 14.5% from 13%. So someone billing £100K + VAT will pay make an additional profit per annum of £375, before taking account of any additional input VAT they might pay.

PUMA

Jurassic Park....

[SackmanandCo]

what do people think the outcome of the IR35 review will be?

[Wanderer]

Only mention of IR35 is 2.74 The Government remains committed to a review of IR35 and small business tax and will release further details shortly.

Looks like we have a stay of execution here.

But as a result of the IR35 review, we will pay LESS tax? I don't think so.

[dx4100]

A good budget for contractors?

Defo....

Only mention of IR35 is

2.74 The Government remains committed to a review of IR35 and small business tax and will release further details shortly.

What we already knew....

[THEPUMA]

Flat rate for IT contractors up to 14.5% from 13%. So someone billing £100K + VAT will pay make an additional profit per annum of £375, before taking account of any additional input VAT they might pay.

PUMA

[Dearnla]

So the increase in Personal Tax allowance will save you £170, but as soon as you spend over £8k on VAT-able goods/services that gets swallowed by the new rate.

CGT reduction probably gives me an extra £700, so add that to the savings on personal tax means that I have an extra £870 disposable income. As long as I don't spend more than approx £40k on VAT-able things, I'm (a very few) quids in.

Just about tax-neutral for me.....

[Fred Bloggs]

A good budget for contractors?

[Clare@InTouch]

Reduction in capital allowances from 20% to 18% - and reduction in annual investment allowance to £25,000.

[rawly]

VAT up to 20%.

It would be good if the Flat Rates stayed the same IN aasociation with CT falling to 20% that's a bit of a gain!!!!

However, I fear not!

[THEPUMA]

Headline rate of CGT up to 28%.

Entrepreneurs' relief left intact so effective rate still 10%.

Personal allowance up by £1K for basic rate taxpayers.