3 things Leeds businesses ought to know about the budget 2015
A little time has passed and you’ve probably seen countless headlines in the local media about what was said in the budget and what it all means – from George Osborne’s composure and the way his speech was scripted, to the budget policies themselves and what opposition parties thought about them – but what does it mean for local businesses in and around Leeds? As dedicated Leeds accountants, here are just four things we think businesses in the area ought to take note of:
Tax returns are about to change for the self-employed
Based on what Mr Osborne said, tax returns could become a thing of the past in 5 years times. That means that if you’re self-employed the traditional tax return, as we know it, could cease to exist. The Government has proposed an integrated digital account for each self-employed worker to view, file and update their tax returns. This could spell the end for the current 10 month tax period and the scramble to get everything done in January which will be music to some people’s ears, but be warned – every positive has a negative. Some experts think that this could prompt a move to monthly ‘real time’ tax return, much like we currently see in our monthly PAYE systems.
Personal allowance is on the rise
As of the 6th April 2015, the personal allowance (that is, the money that everybody is allowed to receive before they start paying taxes) has gone up to £10,600. If you’re a limited company, it means that you’re new monthly directory payroll amount will now be £833.33 per month – however, it could also be lower depending on circumstances like multiple jobs or extra income. Still, this is one of the big things to note from the budget which all businesses should take into consideration.
Entrepreneur’s Relief is, thankfully, still strong
Thanks to entrepreneur’s relief, the best way to save on your tax is to grow a business – something which has been somewhat of a boon for the economy as of late. How does it work? Simple – grow your business, don’t take out more than £40,000 in a year (thus paying no income tax), sell the business and then pay 10% tax on everything. Many people expected this to change in the 2015 budget but it’s remained largely untouched – and it’s a great incentive for the people of Leeds to start and grow their own businesses before selling them on and starting again.