Monthly Archives: March 2018

Spicer & Co Accountant Elected to Industry Committee

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We are proud to announce that our very own Suzanne Spicer has been elected to the ICAEW Practice Committee. Huge congratulations Suzanne!

Suzanne heads up Spicer & Co Chartered Accountants in Dunstable. She was one of seven applicants to be elected, gaining the second highest number of votes of all the candidates.

The Institute of Chartered Accountants in England and Wales (ICAEW) is a world leading professional membership organisation that promotes, develops and supports more than 147,000 members worldwide. The Practice Committee is a representative voice for practice within ICAEW. Suzanne will help guide on the development of services, plus advise on communications and the impact of regulations.

“After working within an established accountancy practice for 10 years, I appreciate the challenges and opportunities facing ICAEW members with smaller accountancy practices,” says Suzanne. “I am thrilled to be elected to the Practice Committee – especially as involvement is voted for and supported by members.

“Community, collaboration and equality are very important to me – both personally and professionally. Being elected to the Practice Committee gives me an opportunity to proactively support others in my accountancy profession.”

Suzanne joins the Practice Committee at an interesting and exciting time for accountancy and business. Cloud technology has had a huge impact upon how businesses and accountants work. Making Tax Digital is set to have an even greater impact. “ICAEW has an opportunity to help members through this change. In the same way that we offer our clients reassurance, I relish the opportunity to be part of this vital support for members.”

We wish Suzanne luck in her new role. We know that she relishes a challenge and hope that she enjoys her time on the ICAEW Practice Committee.

Dividend Tax – All Change from April 2018

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What is Dividend Tax?

If you own shares in a private or a public limited company, you may receive dividends. This dividend income is taxable, and the tax on it is called dividend tax.

New Tax Threshold for Dividend Income

Currently, each person can receive £5,000 tax-free dividend income per year. From 6th April 2018, this amount is changing. The amount of dividend income you will be able to receive tax free as an individual will reduce to £2,000 per annum. This change will apply to all shareholders – from pure investors to director shareholders.

“Many small business owners trade through their own limited company and pay themselves via a small salary plus a dividend out of the retained profits of the business,” explains Suzanne Spicer of Spicer & Co Chartered Accountants in Dunstable. “The new, lower threshold for applying dividend tax may mean that a review is needed. This will ensure that each owner’s business and personal finances remain as tax-efficient as possible.”

This new threshold for applying tax to dividend income is expected to raise an extra £800m to £900m per year for the Treasury. (Source – budget documentation.)

Dividend Tax Exemptions & Rates

Dividend income from ISA investments is exempt from tax. Your first £2,000 income from non-ISA dividends is also tax-free. If you receive more than £2,000 income from your dividends, the tax rates that apply are:

– 7.5 per cent for basic-rate taxpayers

– 32.5 per cent for higher-rate taxpayers

– 38.1 per cent for additional-rate taxpayers.

How Does This Change Affect Small Limited Companies?

Small businesses often face the choice of being set up as a limited company, or operating as a sole trader/partnership. “Despite the changes to dividend tax, it is still more tax efficient to be a limited company at certain levels of income,” says Suzanne. “It’s best to check with your accountant, as your circumstances beyond your dividend income should be considered.”

Is Savings Interest Affected?

There is no imminent change to how your interest from your savings is taxed, although we think that dividends will be brought into line with savings eventually.

The threshold for paying interest on savings income is:

– £1,000 for basic rate taxpayers

– £500 for higher rate taxpayers

– Nil for additional rate taxpayers (all savings interest income will be taxable)

What Should You Do Now?

If you’d like to discuss how the change in dividend income tax thresholds affect you and/or your business, pop in for a chat. We’re here to help and always welcome the chance for a coffee!