Britain will be better off to a tune of £4bn this year as the new personal allowances introduced in the 2014 Budget come into force. The generous tax allowances combined with a flourishing market mean 2015 could be the best year yet to start contracting, consulting or open a small business.
The personal allowance explained
Given the average UK salary is £25,306, some 30 million active workers will be enjoying an extra £136 in their pay packet this year as a result of the new personal allowance. This week the inniAccounts team has been busy fielding enquiries about the new tax code – 1060L – which has made April the first month people are seeing the benefit of the new personal allowance.
The tax-free allowance has gone up from £10,000 to £10,600 for the average worker, and the starting point for paying higher rate tax will increase from £41,866 to £42,386.
If you turn to Twitter you’ll see that it’s alive with people questioning the extra money showing on their pay slip – for the majority of people it won’t be a mistake. They genuinely are better off.
Opportunity to start-up a business
It’s a particularly exciting time for anyone working in a professional role. The new allowances combined with great market conditions create an opportune moment to start out as a contractor or consultant. It’s a chance for people to make the break and become self-employed business owners, especially as they can also take advantage of the £2,000 National Insurance employment allowance.
It’s clear from my own conversations with clients that the market is buoyant. Companies are kicking off projects, initiating growth plans and they’re willing to employ the skills they need – opening up the opportunity for consulting contracts. Over the last few weeks I’ve spoken to an increasing number of professionals in IT, engineering, marketing and HR who are deciding leave behind their corporate roles and create small consulting practices providing specialist expertise.
This hasn’t gone unnoticed by IPSE. This week they’ve published figures showing that record numbers of people are switching their career path to go solo. Thanks to services like inniAccounts, starting out as a contractor or consultant is not a difficult thing to do any more. Every year we help hundreds of people manage their finances efficiently and make the most of tax breaks and the personal allowances.
If you’ve ever thought about starting your own businesses now could be the perfect time to kick start your plans. We’ve even made the first step straightforward: simply grab your free copy of our best selling eBook and we’ll show you how to start your new venture.
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