Spring budget 2024

We bring some highlights as below:

PAYE

National Insurance, a payroll tax, cut by 2p in the pound for employees and the self-employed

Duty

Freeze on alcohol duty, which had been due to end in August, to continue until February 2025

Transport and energy

Fuel duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year

Housing

Higher rate of tax paid on profits from selling property cut from 28% to 24%

Tax breaks for owners of holiday let properties scrapped

Stamp duty tax break when purchasing multiple properties in England or Northern Ireland to end in June

Business and investment

Threshold at which small businesses must register to pay VAT raised from £85,000 to £90,000 from April

Covid-era government loan scheme for small businesses extended until March 2026

Autumn Statement November 2023

In the run-up to the statement, Jeremy Hunt stated the government needed to focus on growing the economy and meeting its pledge to halve inflation by the end of year 2023.

National Insurance cuts: The main rate of Class 1 employee NICs will be cut from 12% to 10% for workers earning over £12,570, benefitting 27 million people.

Self Employed: Class 2 contributions (currently a flat rate of £3.45 a week) will be abolished. Class 4 rate will fall from 9% to 8% on profits over £12,570. 

The UK's National Living Wage will rise from £10.42 an hour to at least £11.44 an hour.

Alcohol duties have been frozen until August 2024.

The change will come into force from 6 January.

Capital Gains Tax Allowance decreases

The capital gains tax threshold is changing in April 2023 to bring more of us into the net.

Capital gains tax (CGT) is charged on the profit you make selling assets (normally excluding your main home). You’ll pay tax on the difference between the original purchase price and the sale price. There’s also an annual tax-free allowance you can use to reduce gains, currently £12,300 per tax year.

The CGT annual allowance is reducing from £12,300 to £6,000 in April 2023 and £3,000 in April 2024 and could mean you have a higher tax bill.

Dividend Tax increase

The dividend tax threshold is also changing in April 2023, meaning that you’ll owe tax on any dividend income over £1,000 and £500 from April 2024, whereas the current tax-free threshold is £2,000.

This means someone with dividend income of £3,000 per year will pay £675 dividend tax next tax year compared with £337 this tax year. From April 2024, they will owe an even higher £843 dividend tax on their earnings.

VAT & MAKING TAX DIGITAL

New law now in place for VAT returns

From today (1 November), businesses are no longer be able to use their existing Value Added Tax (VAT) online account to submit VAT returns.


By law, all VAT-registered businesses must now sign up to Making Tax Digital (MTD) and use compatible software to keep their VAT records and file their returns.


MTD’s aim is to help businesses get their tax right first time by reducing errors, making it easier for them to manage their tax affairs by going digital, and consequently helping them to grow.

Mini Budget - 2022

Stamp Duty Land Tax (SDLT) 

The Chancellor has permanently changed the 0% threshold on SDLT, increasing it from £125,000 to £250,000. 

 For first-time buyers (FTB), the 0% threshold will increase from £300,000 to £425,000. The property value cap for the relief now applies to properties with a value up to £625,000, formally £500,000. 

Personal Tax 

Plans to cut the basic income tax rate have been brought forward by a year, to April 2023. The rate will reduce from 20% to 19%

Corporation Tax 

As expected, Kwarteng is reversing Sunak’s plans to increase Corporation Tax in April 2023 from 19% to 25%; it will now remain at 19%.

Energy Prices 

 This includes the two-year cap on prices for residential homes, meaning the average UK home will typically pay £2,500 a year for gas and electric, £1,000 less than initially thought. The £400 relief on bills this winter (starting from October) will also still apply. 

Self Assessment update

HMRC has announced that we will not charge:

1. Late filing penalties for those who file online by 28‌‌ ‌February 2022. 
2. Late payment penalties for those who pay the tax due in full or set up a payment plan by 1‌‌ ‌April 2022. 

This will give customers and their representatives additional time if they need it and will operate in the same way as the equivalent waivers last year. However, HMRC is encouraging customers to file and pay on time if they can – almost 6.5 million have already done so. 

Please contact us to file online if you are self employed

Autumn Budget 2021:

  • National Insurance rates and thresholds rise, while income tax is frozen

  • state pension to rise by 3.1%

  • price of flying long-haul set to rise

  • new alcohol duties will shave 3p off a draught pint… in 2023

To discuss how this will impact on your business or self assessment, please get in touch with us.

Dividend Tax

The Government has announced that as part of a major social care overhaul the dividend tax will be increased by 1.25 percentage points from next April.

Currently dividends above the £2,000 threshold are taxed at 7.5% for basic-rate taxpayers, 32.5% for higher-rate taxpayers and 38.1% for additional-rate taxpayers.

From next April basic-rate taxpayers will pay 8.75%, higher-rate taxpayers 33.75%, and additional-rate taxpayers 39.35% on dividends above £2,000.

MTD for Self Employment

Making Tax Digital for Income Tax Self-Assessment (known as MTD for ITSA) will require all businesses and landlords with gross income in excess of £10,000 to keep digital records from April 2023. Although 2023 may seem far-off, it’s important to start preparing your practice and clients now.

Budget highlights

COVID-19 support

Extending the Coronavirus Job Retention Scheme (CJRS) until the end of September‌‌‌ ‌2021: The UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June‌‌‌ ‌2021. For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.


The VAT deferral new payment scheme: The new payment scheme helps businesses with deferred VAT to pay what they owe in smaller, monthly instalments from March, interest free.
VAT reduction for the UK’s tourism and hospitality sector: The government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30‌‌‌ ‌September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31‌‌‌ ‌March 2022.


Continuation of the home office equipment expenses COVID-19 easement for the 2021-22 tax year: An Income Tax exemption and corresponding NICs disregard were introduced for the 2020-21 tax year. This allowed employers to reimburse employees for the cost of home office equipment deemed necessary to work from home as a result of the COVID-19 outbreak free from Income Tax and Class 1 NICs. The exemption was due to end on 5‌‌‌ ‌April 2021 but will now be extended to have effect until 5‌‌‌ ‌April 2022.

Personal Allowance and higher rate threshold (HRT): The income tax Personal Allowance will rise with CPI as planned to £12,570 from April‌‌‌ ‌2021 and will remain at this level until April 2026. The income tax HRT will rise as planned to £50,270 from April 2021 and will remain at this level until April 2026.

Government Grants - Top Up Grants For clarity

For clarity; the new one-off top up grant for those businesses in the retail, hospitality and leisure sector that are legally required to close, replace the fortnightly grants which were available before Christmas, they are not in addition.

The one-off payments will be granted on a per property basis as follows:

  • £4,000 for businesses with a rateable value of £15,000 or under

  • £6,000 for businesses with a rateable value between £15,000 and £51,000

  • £9,000 for businesses with a rateable value of over £51,000

These grants can be accessed via your local authority. Should you not qualify for the new top-up grants, then further discretionary funding is being made available, again via Local Authorities; so contact them directly.

Extension to the CJrs

The UK government announced an extension to the Cornavirus Job Retention Scheme and delay of the less favourable Job Support Scheme due to start on 1 November 2020.
Full details awaited but some important details include:

- To be eligible employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. There is no requirement for an employee to have previously been furloughed

- Employees can be fully or partially furloughed and will be paid 80% of their salary for hours not worked (up to a maximum of £2500)

- Employers’ contribution will be employer NICs and pension contributions, but they should continue to pay the employee for hours worked in the normal way. Employers can top up employees at their own expense.

- Agreements reached with employees to transition to the new Job Support Scheme will need to be revisited.

Job Support Scheme for small businesses

In September 2020, the government announced a new Job Support Scheme. It replaces the furlough scheme, which ends on 31 October.

The Job Support Scheme starts on 1 November and will last six months. It’s designed to protect ‘viable’ jobs in businesses facing lower demand this winter because of Covid-19.

Businesses will pay employees for time worked, with the cost of hours not worked split between the employer, the government (through wage support) and the employee (through wage reduction). The government’s contribution is capped at £697.92 a month.

Employees must work at least a third of their normal hours.

The government says this will ensure employees earn a minimum of 77 per cent of their normal wages.

How do I get this support?

You don’t need to have used the furlough scheme to take part. You need to have a UK bank account and UK PAYE schemes.

Employees need to have been on the payroll on, or before, 23 September 2020.

The scheme will be open from 1 November 2020 to the end of April 2021.

You can make a claim online through gov.uk from December 2020 and you’ll be paid on a monthly basis.

Grants are paid in arrears. This means that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.

Test and Trace - Business requirements

From Friday, 18 September businesses will be legally required to keep attendee details to support NHS Test and Trace. It will become mandatory for certain businesses including the hospitality and tourism and leisure sectors, close contact services and places of worship to have a system to collect NHS Test and Trace data, and keep this for 21 days.