Daily Archives: 30th April 2018

Optimum tax efficiency in 2018/19

Optimum tax efficiency in 2018/19

From 6 April 2018 the dividend allowance will drop to just £2,000, coinciding with the annual shifts in the personal allowance and basic rate band.

6 April 2018 will see the latest uplift in the personal allowance and basic rate band. However, this year the dividend allowance (which is only two years old) will fall by 60% to just £2,000 per individual. The NI thresholds are also increasing.

Dynamic coding teething problems

Dynamic coding teething problems

HMRC’s new dynamic coding has been in place since July 2017, but a problem has been identified which has changed its operation slightly.

HMRC is pushing ahead with its Making Tax Digital (MTD)agenda. Whilst the main implementation for corporation and income tax has been delayed, the first element of MTD is already here. Dynamic coding (or PAYE Refresh) was implemented from July 2017.

In theory, dynamic coding aims to speed up the collection of tax via PAYE code adjustments, partly by making use of real time information (RTI) submissions.

Depending on the amount of the underpayment, issues can arise where circumstances change, but the code is not adjusted until later in the tax year.