Things to consider…..


Corporate Gains.

Legislation is to be introduced to freeze the indexation allowance when computing the chargeable gains of companies. Indexation allowance for disposals which occur on or after 1 January 2018 will be computed by reference to the RPI indexation factor for December 2017, regardless of the actual date of disposal for the asset.

Comment: Currently companies receive relief for inflationary gains, while individuals do not. This new measure will bring the treatment of capital gains for companies in line with that of individuals. Indexation is frozen for assets acquired before 1 January 2018 and disposed of after that date. Any assets acquired on or after 1 January 2018 will not benefit from any indexation allowance.


National Insurance Contributions

As a result of the delay to the reforms to national insurance for the self-employed, self-employed earners will remain liable to pay Class 2 NIC’s in 2018-19 where their earnings for self-employment exceed the small profits threshold. This is set at £6,205 for 2018/19, and the Class 2 rate is set at £2.95 per week.

The reforms to Class 4 contributions will now not take place until April 2019. Consequently the existing structure continues to apply for 2018/19. Class 4 contributions at the main rate of 9% are payable on proftis between £8,424 and £46,350 and at 2% on profits in excess of £46,350.



National Living Wage: NLW for workers aged 25 and over is increased to £7.90 from 1st April 2018.

National Minimum Wage: NMW is also increased from 1 April 2018. The rate will rise to £7.38 per hour for workers aged 21 to 24, £5.90 for workers aged 18 to 20 and £4.20 per hour for 16 and 17-year-olds. The apprentice rate for apprentices under 19, or over 19 and in their first year of an apprenticeship increases to £3.70 per hour.


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source: Small Business Tax & Finance, Dec 17 edition