The Government gave a great big kick up the bum to all business owners yesterday; self employed and owner operated limited companies alike.
The self employed will be hit by the increase in Class Four National Insurance which will increase by 1% from April 2018 and 1% again from April 2019 to 11%.
The owner operated limited companies will pay more tax on dividends with the dividend allowance (only introduced in April 2016) decreasing from £5,000 to £2,000 from April 2018.
I was asked what I thought about these changes; I think the following makes my views quick clear …..
Elaine Clark, an accountant and founder of tax firm Cheapaccounting.co.uk, which will be hit by changes, said: ‘The Government only introduced the £5,000 dividend allowance a year ago and now it’s changing the rules again.
‘It’s a real muddle and it means that small business owners like myself can’t plan one year to the next.
‘Speaking as an entrepreneur, at every turn it feels like the Government is doing more to kick you, without appreciating how hard it is to set up on your own. Being a business owner is not a nine-to-five job, nobody pays into your pension and there’s no holiday pay.
‘But the Chancellor’s announcements leave us business owners feeling disenfranchised about the whole system of taxation – it doesn’t make me want to work harder because it feels like you’re taxed more for doing well.’