The Budget 2016

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The Budget 2016

Postby Graysalchemy » Thu Mar 17, 2016 8:20 pm

What does everyone think of the Budget?

Personally I was quite pleased as several of the chancellors changes will benefit me and my company.

The main ones being reduction of corporation tax and the changes to the small business rate relief, my building will now qualify for 100% rate relief as the threshold has been raised from £6000 to £15000.

However as a limited company paying dividends we will be hit by the new dividend tax announced back in the autumn statement, so it looks like we will be worse off until 2017 when the reduction in corporation tax comes into effect

Personal tax allowance is up and for those of you not VAT registered the VAT threshold has been increased as well.

What do others feel about the budget?
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Re: The Budget 2016

Postby IFGL » Thu Mar 17, 2016 9:25 pm

I had pretty much the same feelings Alistair.
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Re: The Budget 2016

Postby Jamesnkr » Fri Mar 18, 2016 9:43 am

Make sure you have paid out the maximum dividend possible from your company before 5 April (when the 7.5% dividend tax comes in). You should leave yourself with zero distributable reserves, if possible. You may wish to lend money to your company in order for it to do this.

Don't forget, if you have made the frames for a customer, but haven't been paid for them yet, you can still distribute this profit - provided you can get hold of cash from somewhere.
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Re: The Budget 2016

Postby Graysalchemy » Fri Mar 18, 2016 9:48 am

Yes we are declaring as much of a profit as possible and paying out on dividends before April 5.
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Re: The Budget 2016

Postby GeoSpectrum » Fri Mar 18, 2016 12:03 pm

This is new territory for me but my accountant is telling me to wait and see as currently it's not worth me registering however I'm tempted in order to put the business the right footing for the future when CT comes down. That is about the limit of my understanding of the subject...
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Re: The Budget 2016

Postby Jamesnkr » Fri Mar 18, 2016 12:33 pm

GeoSpectrum wrote:This is new territory for me but my accountant is telling me to wait and see as currently it's not worth me registering however I'm tempted in order to put the business the right footing for the future when CT comes down. That is about the limit of my understanding of the subject...


Do you mean registering for VAT? Or forming a company? Quite separate activities!
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Re: The Budget 2016

Postby Graysalchemy » Fri Mar 18, 2016 12:55 pm

There i no benifit in registering for VAT unless you are likely to hit the VAT threshold or you are dealing with corporate or trade clients who want a VAT invoice. In anycase you should always add a VAT element to you pricing so that if you do hit the VAT threshold you are not all of a sudden 20% worse off or your clients not having to swallow a 20% hike. If its there to begin with your customers are non the wiser and you have a nice little Brucey Bonus.
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Re: The Budget 2016

Postby GeoSpectrum » Fri Mar 18, 2016 3:38 pm

I was referring to forming a company, not much channce of getting to the VAT threshold without killing myself in the process. That's an interesting point Alistair, about VAT, I'm about to review my pricing and it might be an opportunity to start to ease things up a little as I haven't raised my prices for a while.
Alan Huntley
Ashcraft Framing
Plain wood frames, Inlay/tray frames and painted frames for artists.
http://www.ashcraftframing.co.uk
Twitter: @AshcraftFrames
Our Blog: http://ashcraftframing.wordpress.com/
Doing nothing is a much underrated activity
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