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Connolly Accountants Ltd have a wealth of experience in advising businesses and individuals in the Stony Stratford area on a range of key tax and financial planning issues. Here we consider strategies to help you to minimise your tax bill, maximise your profitability and boost your wealth.
Several significant tax changes were announced in both Autumn Statement 2023 and Spring Budget 2024.
The UK-wide personal allowance was frozen at £12,570 from 6 April 2021. The basic rate band threshold has also been frozen at £37,700. The personal allowance and thresholds are expected to remain at these levels until April 2028.
There have been no changes to the rates of taxation on non-savings and savings income. The rates of taxation on dividend income for 2023/24 will remain at the increased levels introduced from 2022/23 of 8.75%, 33.75% and 39.35%. The Dividend Allowance has been reduced to £500 for 2024/25.The Savings Allowance remains at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers (no Savings Allowance is available for additional rate taxpayers).
Scottish taxpayers: income tax rates and bands for non-savings and non-dividend income are different from the rest of the UK. For 2024/25 a new 45% rate will be introduced, making six income tax rates which range between 19% and 48%. Scottish taxpayers are entitled to the same personal allowances as individuals in the rest of the UK and the rates on savings and dividend income are as for the rest of the UK.
The main rate of Class 1 employee National Insurance Contributions (NICs) was cut from 12% to 10% from 6 January 2024. A further cut to 8% was made from 6 April 2024.
The main rate of Class 4 NICs payable by self-employed individuals was also reduced from 9% to 6% from 6 April 2024.
In addition, the need to pay Class 2 NICs was removed from 6 April 2024 for self-employed individuals with profits above £6,725; individuals will continue to get access to contributory benefits. It remains possible for those with profits below £6,725 to voluntarily pay Class 2 NICs in order to access contributory benefits.
The thresholds for Class 1 NICs and Class 4 NICs remain at 2023/24 levels.
The main rate of corporation tax remains 25% where profits for an accounting period exceed £250,000. If a company has no associated company in the accounting period and its profits do not exceed £50,000, the small profits rate will be 19%. If a company has no associated company in the accounting period and its profits are between £50,001 and £250,000, a marginal rate will apply.
If a company has one or more associated companies in the accounting period then the limits are divided by the number of associated companies plus one. For an accounting period of less than 12 months the lower limit and the upper limit are proportionately reduced. There are a number of complex rules regarding associated companies.
In the face of ongoing change, it is more important than ever to have a robust business and personal financial planning strategy in place, to help ensure that you and your family are financially secure and on course to achieve your long-term goals.
If you're in the Stony Stratford area and would like advice on tax planning strategies, please contact Connolly Accountants Ltd .
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