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What's in store for the new tax year?
Apr 29, 2024
The new tax year started over 3 weeks ago with several important changes coming into effect. Here's a reminder of what has changed:
- Dividend Allowance Reduction: The dividend allowance has been cut from £1,000 to £500.
- Halved Capital Gains Tax Exemption: The annual exempt allowance for capital gains tax (CGT) has been halved from £6,000 to £3,000. Just two years ago, it was at £12,300, marking a significant decrease.
- New CGT Rate for Property Sales: A reduced CGT rate of 24% will now apply to residential property sales, down from the usual 28% for higher-rate taxpayers. The standard 18% rate remains unchanged.
- Lower Employee National Insurance Contributions (NICs): Employee NICs have been reduced by 2% to 8%, marking the second reduction since January. This will save the average worker earning £35,400 over £900 annually.
- Frozen Tax Thresholds: Basic rate and higher rate tax thresholds remain frozen until 2028 at £12,570 and £50,271 respectively. This freeze is expected to push over a million taxpayers into the higher rate tax band, with no changes to the additional 45% threshold at £125,140.
- Lower Self-employed Class 4 NICs: The main rate of Class 4 NIC has been reduced to 6% from 9%, along with the discontinuation of the need to pay Class 2 NICs.
- Increased High Income Child Benefit Charge (HICBC): The threshold has been raised to £60,000 from £50,000, with a tapered charge for incomes between £60,000 and £80,000. Child benefit rates have also increased so the eldest child now receives £25.60 a week, all other children receive £16.95 each a week.
- State Pension and Working Tax Credit Adjustments: The state pension increased to £221.20 a week, and the basic element of working tax credit rose from £2,280 to £2,435.
- Changes to Private Pensions: New lump sum and death benefit allowances have been introduced, with the removal of the lifetime allowance.
- Rise in ATED Charges: The annual tax on enveloped dwellings (ATED) has seen a 6.7% increase from April 1, 2024, in line with the September 2023 CPI
Starting in early 2025, Companies House will begin rolling out new identity verification requirements for company directors and persons with significant control (PSCs). This means that, in the future, before filing information on the Companies House register, directors will need to prove their identity. This change is designed to reduce fraud and improve transparency. The reforms are part of the Economic Crime and Corporate Transparency Act 2023, which aims to combat fraudulent activity. As part of these reforms, accountancy firms and solicitors registered for anti-money laundering (AML) supervision will be among the first required to comply, starting in early 2025. By spring 2025, accountants and other professional service providers, who are registered for AML supervision, will be able to become authorised corporate service providers (ACSPs). This means they’ll be able to help clients verify their identities and pass that information on to Companies House. By autumn 2025, these new ID verification requirements will be mandatory for new directors and PSCs when setting up a company or making new appointments. If your business already exists, you will have a 12-month transition period until autumn 2026 to ensure your directors and PSCs comply with these requirements when your next confirmation statement is due. This is a significant change, therefore it’s important to stay ahead of these requirements to avoid any disruptions to your business.
Tips to ensure your bookkeeping stays on track during the holiday period.
All the important tax deadline filing dates
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Starting in early 2025, Companies House will begin rolling out new identity verification requirements for company directors and persons with significant control (PSCs). This means that, in the future, before filing information on the Companies House register, directors will need to prove their identity. This change is designed to reduce fraud and improve transparency. The reforms are part of the Economic Crime and Corporate Transparency Act 2023, which aims to combat fraudulent activity. As part of these reforms, accountancy firms and solicitors registered for anti-money laundering (AML) supervision will be among the first required to comply, starting in early 2025. By spring 2025, accountants and other professional service providers, who are registered for AML supervision, will be able to become authorised corporate service providers (ACSPs). This means they’ll be able to help clients verify their identities and pass that information on to Companies House. By autumn 2025, these new ID verification requirements will be mandatory for new directors and PSCs when setting up a company or making new appointments. If your business already exists, you will have a 12-month transition period until autumn 2026 to ensure your directors and PSCs comply with these requirements when your next confirmation statement is due. This is a significant change, therefore it’s important to stay ahead of these requirements to avoid any disruptions to your business.
Tips to ensure your bookkeeping stays on track during the holiday period.
All the important tax deadline filing dates