The tax-free dividend allowance will be reduced from £5,000 to £2,000 from April 2018. The reduction recognises the increased ISA allowance, which will rise to £20,000 from this April, as well as further increases to the tax-free personal allowance.
The Budget announced that the main rate of Class 4 National Insurance contributions (NICs), paid by the self-employed, will increase from 9% to 10% in April 2018, and to 11% in April 2019. The chancellor confirmed the abolition of Class 2 NICs – a flat-rate charge on the self-employed – from April 2018. Taken together with the increase in Class 4 NICs, this means that self-employed individuals with profits above £16,250 will have to pay more NICs.
This is not what is needed in an economy who is in dire need of growth.
Many employees work 9-5 and can close the door behind them. As owners of a business we have the worry of all the costs, loans and growth and paying the wages 24 hours a day. Although I appreciate the need to support the system and that the country must find ways of balancing the books. This is not the way to do it.
They may have made it fairer on pension provision but not on risk. The risk of setting up on relationships, your home, time is worth something. In the end we need a tax system that asissts entrepreneurs to develop.