The new tax year presents a number of changes that will impact your finances and tax obligations.
Start the tax year right by scrutinising your current plans, including savings, investments, and tax compliance.
Here are the crucial updates that are effective from 6 April 2024:
How will the changes impact you?
The reduction in Class 4 NICs, along with the removal of Class 2 NICs for higher earners, will simplify the tax process (if you are self-employed) and might further lower your overall tax bill.
This might free up funds for any business growth or personal investment you wish to achieve.
However, the end of Class 2 NICs might require voluntary contributions to qualify for certain state benefits.
The VAT threshold increase to £90,000 will benefit your SME as it could potentially postpone your registration for SME and will have a positive impact on your cash flow and compliance efforts.
Always assess your business’s current and projected turnover in order to stay compliant with the new VAT registration threshold.
Sometimes, it is best to register for VAT early as this will simplify your pricing form and allow access to the Flat Rate Scheme which gives you a clearer view of your VAT liabilities.
The removal of Multiple Dwellings Relief in June 2024 calls for property investors to carefully change their plans – this will also make bulk properties for expensive which is something you need to consider.
Investors might need to consider alternative tax-efficient strategies – this can include focusing on commercial properties or investments that qualify for additional tax reliefs.
The Government are pushing for investment in digital and green technologies through tax reliefs, like Enhanced Capital Allowances, as this will offer significant savings and further encourage investment in qualifying projects.
This could include:
For higher-rate taxpayers, the CGT rate, for second homes and additional properties, will drop from 28 per cent to 24 per cent and will create a more favourable tax scenario for property disposal.
Therefore, we suggest a review of disposal timing and strategy is necessary to maximise benefits.
When looking towards the future, you will need to consider the tax reform that targets non-UK domiciled individuals – this will increase tax duties for those residing in the UK for over four years and will start in April 2025.
These upcoming changes emphasise the importance of reviewing residency status, meaning you might need to restructure your financial affairs to soften the blow these changes can carry.
As the tax environment changes significantly in the 2024/25 tax year, it is critical you complete a proactive review and adapt your financial and tax planning strategies.
It is essential you consult our tax experts as they can offer you tailored advice, whilst ensuring effective navigation through the tax system and optimisation of your financial standing.
If you require more information on your new tax liabilities, please contact one of our team today.
