Taj's first blog of 2016. Taj takes a look in to what the new year holds for contractors including dividend tax changes, IR35 proposals, buy to let properties and The Budget. The date for the budget has been set for the 16th March 2016. The things to look out for include pension reforms and tax free allowances.
Taj will keep you updated as things unfold throughout the year.
Happy New Year to you and welcome to my blog, the first one of 2016 so I just want to have a brief look at what the year may have in store.
For contractors, just looking at the wider economic picture one of the main topics that came out of 2015 was the Chancellor making some rather sweeping changes to things like dividend tax. So obviously a lot of you will be using limited companies as your payment mechanism. There are going to be dividend tax changes coming in this year, there’s a new £5000 tax-free allowance for dividend tax, and then on top of that, tax based on your tax banding so that's the first change i.e. no salary allowance now for contractors.
Going beyond that, we also have an announcement we’ve been promised early in the new year
with regards to IR35 and some kind of policy statement from the government. Watch that one with baited breath but I wouldn’t hold my breath either, because we've been here before and IR35 remains intact and its current form.
The final thing to look out for is the Budget itself at the end of the first quarter, March the 16th in fact, this is when the Chancellor will be announcing the Budget. Things to look out for are going to be whether any pension reforms, tax-free allowances are brought in to the rather sweeping changes that have already been made to things like stamp duty.
Whilst we are on the subject of stamp duty, there’s obviously the buy to let situation on second
properties whereby there is a stamp duty hike of 3%. We’ve had a bit more information regarding this and even those of you who are looking to retain existing properties that you live in, for buy to let purposes and then buy a new residence, you are still going to be subject to unfortunately a three per cent stamp duty hike. Not great news if you are looking to move next year or retain existing policy, but good news if you're a first-time buyer as the government has promised to help first-time buyers with deposits.
So that's the agenda for 2016 in terms of what we know right now, I will of course keep you updated as things unfold. I’d like to wish you all a fantastic 2016 and hope it is a prosperous one for you and you continue to contract the same way that you have been in 2015. All the best for the time being and I’ll catch up with you in a month's time.