The 2024 Budget: What It Means for You and Your Business
The 2024 Budget: What It Means for You and Your Business
The UK government has just unveiled its latest budget, and there are some important changes that could impact your personal finances and business operations. Let’s break it down in simple terms:
For Your Household:
National Insurance cuts: The rate of employee’s NICs has been reduced by another 2% down to 8% now. It was previously reduced from 12% down to 10% in the Autumn Statement and this certainly means more money in your pocket from your hard-earned income.
Child Benefit Boost: If you have kids, the income threshold at which Child Benefit is clawed back will increase from £50,000 to £60,000 next year. There will be a tapered clawback of child benefit on income amounts between £60,000 and £80,000. Even better, by 2026, they plan to base it on household income rather than just your individual income.
Capital Gains Tax:the rate on residential property gains for higher rate taxpayers is dropping from 28% to 24% next year. This is welcome news for anybody planning to sell a residential property in 2024-2025.
Tax rules are changing for “Non-Doms” – the remittance basis system will be scrapped and replaced. The current remittance basis of taxation will be abolished for UK-resident non-domiciled individuals. This will be replaced from 6 April 2025 with a new 4-year foreign income and gains (FIG) regime for individuals who become a UK tax resident after a period of 10 years of non-UK tax residence
Tax Relief on Savings: The government wants to encourage more saving by introducing a new UK Individual Savings Account (ISA) with a £5,000 allowance on top of the existing ISA limit. More details on this are coming soon.
For Your Business:
FHL Status for holiday let properties will be scrapped in 2025. This is a very unwelcome development for anybody who owns a holiday let and especially for those who have a mortgage financing a FHL investment. In this situation, you should definitely speak with us to find out how this might affect you going forward. This is one of the toughest parts of this Budget announcement.
Class 4 NICs: self-employed people will see a welcome cut in their Class 4 NIC rates from 8% currently down to 6% from April 2024. This is the sole-trader equivalent of the 2% cut for employees. You’ll see this tax cut when you prepare your sole-trader tax return for your income for the 24/25 fiscal year.
VAT Threshold Increase: The VAT registration threshold for businesses will rise to £90,000 of taxable turnover from April 2024. This could help relieve some administrative burden for smaller firms. The VAT Registration threshold has stayed the same for the last 7 years, and so this is a welcome development.
R&D Tax Relief Help: If your company invests in research and development, there will be an expert panel to assist with claiming the relevant tax reliefs. This should make the process smoother.
Other Measures include:
– Creative Industry Boosts: For businesses in creative sectors like film, TV, theatre and museums, there are increases to certain tax relief rates to provide more support.
– A new vaping product duty will be implemented in 2026.
– Multiple Dwellings Relief for Stamp Duty Land Tax purchases is being abolished.
Of course, taxes can get complicated quickly. But the key takeaway is that this budget contains a mix of tax cuts and reliefs aimed at putting more money in people’s pockets .
Speak to us to find out how these changes might affect you.