There are a number of unhelpful changes to tax law that may increase your tax liability in the year commencing 6 April 2016. I will set out a very brief summary here. Contact me with specific questions for a more detailed response.
Dividends
The new tax on dividends will be felt mainly by one person limited companies that remunerate their owners via a small salary and substantial dividends.
Travel and subsistence
If a contract is agreed where the contractor is considered to be under the supervision, direction or control of the end client, then tax relief on regular commuting costs will be not be allowed. Other than that the IR35 rules will continue to operate.
( the IR35 rules are currently under review and it is hoped that in due course more clarity will be introduced to this murky legislation)
Stamp duty
Purchase of buy to let properties or second homes will attract an additional 3% stamp duty.
Interest on loans for second homes
From 2017/18 tax relief on the finance costs of purchasing second homes or buy to lets will be restricted and by 2020 will only be available at the standard rate.
Pensions
There are proposals being considered to further reduce tax relief on contributions to pension schemes.
Employment allowance
Employers have been allowed to keep the first £2,000 of employers national insurance contributions. This will increase to £3,000 from 6 April 2016. However one person companies will be excluded altogether.