Changes to Income Tax
Personal allowance is now set at £11,000.
The basic rate threshold is now set at £32,000 which means earnings in excess of the personal allowance up to this threshold are taxed at 20%.
Earnings between £32,001 and £150,000 are taxed at 40% and Income over £150,000 would fall into the additional tax rate which is taxed at 45%.
Personal allowance will be reduce on income over £100.000 at rate of £1 for every £2 on income, which means at £120,000 personal allowance is wiped out. The £20,000 earned over £100,000 is effectively taxed at 60%.
The new dividends regime is now in place. Under the new regime the first £5,000 is tax free, after that the basic rate tax is set at 7.5%. Dividends at higher rate are taxed at 32.5% and 38.1% at additional rate tax.
Capital Gains Tax (CGT)
Capital gains tax was reduced from 18% to 10% at the basic rate, from 28% to 20% above basic rate of earning, although this reduction does not apply to residential property which will continue to be taxed at the previous higher rates.
VAT compulsory registration threshold is set at £83,000 in any 12 months period.
If you receive goods worth more than £83,000 from the EU in the UK then you must register for VAT.
You must register within 30 days of your business turnover exceeding the threshold however you may wish to register voluntarily if your turnover is below the threshold of £83,000 or if its advantageous to your business, perhaps you sell mostly to UK vat registered businesses?
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