Responsibility for determining IR35 falls to public sector engagers
Public sector bodies, rather than individual contractors, are now responsible for determining whether IR35 applies. HMRC has released a new tool to help contractors and engagers determine whether a contract is caught by IR35. Abacus Jack customers can continue to use the software to work with their public sector contractor clients by following the new workflow in the software.
See our detailed article on how to account for the new IR35 regulations in your day to day business finances and bookkeeping.
Income tax thresholds changed
Changes to the personal allowance, the basic rate limit and the higher rate threshold have come into effect for clients in England and Wales. The new limits for the 2017-2018 tax year are:
- Personal Allowance £11,500
- Basic Rate Limit £33,500
- Higher Rate Threshold £45,000
Changes to the Scottish rate of income tax
Meanwhile, the Scottish Parliament now sets all income tax rates and bands (except the personal allowance) for your clients who are resident in Scotland. The higher rate of 40% now applies to those in Scotland who earn over £43K, whereas in the rest of the UK the higher rate will apply after income of £45K.
National Insurance rates for employers and employees aligned
The National Insurance threshold is now the same for employers and their employees. The weekly earnings threshold for NI has changed too - if an employee’s income falls below £157 a week then they don’t have to pay any contributions.
If you would like help with any aspects of your bookkeeping, your business finances, administration or tax obligations, please get in touch with us directly on 0191 4862126 or email firstname.lastname@example.org