Employment Costs Rocket!

Liverpool accountants take on national minimum wage increase

Andrew Keates Accountants we are continuing our explanation of July’s Announcements George Osbourne and their effects on Liverpool’s Small businesses,

In July Chancellor declared a 50% raise to the national insurance employment allowance coming from £2, 000 to £3, 000, which will support small enterprises to decrease their wage bill and may even offset the elevated Living Wage charge.

The decrease to corporation tax may also aid in relieving the cost demand of the wage increases but a lot depends on the amount of low-paid employees a company has and its particular degree of profitability.

As outlined by accountancy firm BDO, the Employment Allowance is only going to allow business employers (who are paying minimum wage) to balance out the cost of the Living Wage increases approximately up toTwo Thousand hours. From then on, the company will be a net loser unless of course it is profitable enough to take advantage of the cut in the rate of corporation tax.

Many small company pundits were not impressed from the announcement.

Philip Salter, director of the Entrepreneurs Network, explained: “The Government should keep the decision of exactly what level to set any wage floors in the hands of the professionals at the Low Pay Commission, making sure that companies aren’t compelled to sack personnel if payroll costs climb an excessive amount.

“If the Chancellor wished to help the lower paid workers, he needs decrease Employers’ National Insurance, 70% of which is taken care of by the employees, as opposed to just raise the Employment Allowance from £2, 000 to £3, 000 per year.

For more information from Liverpool Accountants Andrew Keates and how the employment cost changes will affect your business please call one of our advisor for no obligation chat today!


£5,000 Tax Fee Pay For Liverpool Business Owners. Good news or Bad?

George Osbuorne tax changes

Liverpool Accountants Andrew Keates Explain How To Make The Most Out Of George Osborne’s July Budget Announcements. Few businesses know the pain of small business taxes as well as we do. We have been working with small businesses across Liverpool for over a decade and know from experience that far too often tax changes are bad changes!

But July’s budget announcement came with a small sweetener for any micro-business owner that is sick of hearing the latest way for their profit margins to be squeezed. From April 2016 the government will scrap its current dividend tax credit and will replace it with a new tax-free dividend allowance of £5,000 a year.

However as good as this sounds for micro businesses, it may not be good for larger businesses. These changes will inevitably lead to small UK businesses paying 7bn more a year in taxes. Because with this tax break also comes a tax rate increase, only the 1st £5,000 a year will be tax-free! At the moment small business owners have the option of paying themselves dividend income at 30.6% tax rate. From next year this will increase to 38%. But capital gains tax is currently 28% and will not change next year! This places enormous pressure on Liverpool businesses to sell up and to benefit from the capital gains tax.

So can you make this tax change work in your favour and make sure that you keep more of your hard earned cash and give less away to the government? Well as top Liverpool Accountants of course we have the answer and we are happy to help, it’s important to know there isn’t one simple solution as no one businesses is the same so to get the answer that is right for your business call us on 0151 277 5353 for a now obligation chat with one of our tax advisors.