Budget 2017 – what it means for construction workers
As you’ll no doubt be aware, Wednesday 8th March was Budget Day. There was a lot to take in!
From electronic vehicles to National Insurance Contributions (NIC), we’ve pulled together a few thoughts on how this impacts self-employed construction workers.
Important update: on the 15th March 2017, Chancellor Philip Hammond announced that there will no longer be an increase to the National Insurance rates paid by the self-employed.
Our Tax Teams View
“As Class 2 NIC is being abolished from April 2018, there will be a saving of £145.60 per annum to counteract the increase of Class 4 NIC from 9% to 10% from April 2018. Therefore, people with profits of more than £16,250 will pay more NIC following the changes in April 2018.
As an example, the NIC payable in the 2018/19 tax year for a contractor on £25,000 per year would be £1,694 compared to £1,670.20 in the 2017/18 tax year, which is an increase of £23.80.
However, the 2017/18 personal allowance will increase from £11,000 to £11,500, which would mean a tax saving of £100 for an individual with a £25,000 profit”.
To round everything up…
- You’ll be better off by £100 per annum from 2016/17 to 2017/18 due to the increase of the personal allowance.
- From the 2017 Budget though, you’ll be £23.80 per annum worse off due to the Class 4 increase from 2017/18 to 2018/19, (however please note this does not take into account any potential personal allowance increases which have not been announced)
If you would like to talk to us about how the Budget 2017 affects you personally, just give call on 0800 073 1218. and we’ll be happy to help.