14 February 2024

Making Tax Digital review for small businesses

Under the government’s original plans, anyone required to submit Income Tax Self-Assessment returns to HMRC would have been obligated to sign up for the Making Tax Digital (MTD) service by April 2024 – but the implementation of MTD for ITSA has since been delayed until April 2026. Switching to the online tax service will initially be mandatory for landlords and self-employed earners with income over £50,000 a year, while those with annual income below this but above £30,000 will be required to join from April 2027. Before setting a deadline for extending MTD to smaller businesses earning less than £30,000 a year, the government conducted a review to consider how this might affect the needs of small businesses. The outcome of the MTD small business review is the announcement that there are no plans to extend MTD for ITSA to landlords and the self-employed earning below £30,000 a year for the foreseeable future – though this may be reviewed again. Here’s a short guide explaining what self-employed workers and landlords should know about current changes to MTD for ITSA.

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12 February 2024

New lease and property listing rules for landlords

From Property Alerts for fraud prevention, to energy efficiency requirements for rented properties, to Making Tax Digital for Income Tax delays – it’s essential for landlords to keep up with the latest regulatory changes. For example, the Leasehold and Freehold Reform Bill was introduced in Parliament last November and is likely to be passed into law in mid-2024. Also in November, the National Trading Standards Estate and Lettings Agency Team (NTSELAT) published two more sections of guidance for sales agents and letting agents regarding ‘material information’ in property listings. Here’s what these changes could mean for landlords when it comes to advertising a property or extending a lease in 2024.

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07 February 2024

New ISA rules from April 2024

Following announcements made in the Autumn Statement 2023, new rules will come into effect for individual savings accounts (ISAs) from April this year. Since launching in 1999, ISAs have offered an excellent route for building up tax-free savings, with different options and regulations introduced over the years. Allowing savers to set aside ad-hoc sums up to an annual allowance, sheltered from income tax and capital gains tax, it’s no wonder that ISAs are so popular. Now, changes coming into effect on 6th April 2024 to make ISAs more user-friendly will also make them even more attractive to more people hoping to build their savings – but there are some limitations to be aware of.

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05 February 2024

Business rates relief 2024/2025

Last November, the measures announced in the Autumn Statement 2023 included some extensions and some cuts to business rates relief for the 2024–2025 tax year. While the business rates burden may be alleviated for some businesses in England and the Scottish islands, businesses in Wales sadly will not be as fortunate. Here are the latest figures for business rates relief and multipliers from 1st April 2024.

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01 February 2024

National Insurance cuts could save workers hundreds of pounds

Calculated according to employment status and earnings, it’s essential for workers to pay National Insurance Contributions (NICs) to help provide funding for essential public services like the NHS, state pensions, and state benefits. However, many people believe they are building up a national fund, when it’s more of a ‘pay as you go’ system – each year’s contributions pay for that year’s benefits. Framing NICs that way, rather than as just another tax on income, previously allowed politicians to make headlines over basic income tax changes with less attention on revenue from increased NICs – but the Chancellor Jeremy Hunt seemed to give up on this approach last November. In the Autumn Statement 2023, it was announced that upcoming NIC reductions would be the equivalent of tax cuts for employees and self-employed people. As of 6th January 2024, the main rate of National Insurance has dropped by 2%, which is effectively a 15% reduction in National Insurance Contributions – resulting in significant savings for millions of workers across a variety of sectors. Here’s a summary of the changes to NICs in 2024 and what this could mean for you.

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17 January 2024

When should you start planning for retirement in the UK?

According to the Office for National Statistics, the median age of the UK population increased from 30.96 years old in 2011 to 40.7 years old in 2021. This gradual ageing of the population, combined with shifting work patterns brought about by COVID-19, has led to a rise in research on attitudes towards retirement. The latest report to investigate such attitudes is Standard Life’s Retirement Voice 2023. One of the topics it covers is the benefit of planning ahead for retirement – but what do people in the UK think about retirement planning, and when is the best time to start?

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15 January 2024

National Living Wage and National Minimum Wage increase in 2024

In welcome news for young workers and apprentices, minimum wage rates will increase substantially from 1st April 2024. However, this may put more pressure on employers who are already struggling in a difficult economic climate, as even small employers must pay the appropriate minimum wage. Almost all workers in the UK are entitled to a minimum hourly pay rate known as the National Minimum Wage. The National Living Wage is a higher minimum pay rate currently available for workers over 23 years old, but this age limit will be reduced to 21 years old in the coming April.

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12 January 2024

Expanding cash basis as the default

The current default accounting method for businesses in the UK is accruals basis accounting, which involves noting transactions as they happen instead of upon payment of invoices. If a qualifying business wanted to use cash basis accounting to record transactions when payments are completed, they would have to opt in. However, following the Autumn Statement in November 2023, the government will make cash basis accounting the default instead. This means cash basis will be the standard method of calculating trading profit for self-employed traders and partners with trading income, taking effect from the start of the 2024–2025 tax year. Businesses will now have to use the cash basis scheme and opt out if they want to use the accruals basis scheme instead. This should make it simpler for most businesses to complete tax returns reporting their income to HMRC.

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11 January 2024

Concerns remain over merging R&D tax relief schemes

While Research and Development (R&D) tax relief was introduced to encourage UK companies to make innovative investments that could boost the economy, the government is reforming this system due to concerns over fraudulent tax relief claims. In addition to switching to online or digital submissions only and requiring more information for R&D tax relief applications from April 2023, the government announced in the November 2023 Autumn Statement that the Research and Development Expenditure Credit (RDEC) scheme and the small or medium enterprise (SME) R&D relief scheme would be merging into one from April 2024. These two schemes will merge into a new scheme that is similar to the RDEC scheme currently used by large companies, which will eliminate the complexity of moving between schemes. This is designed to simplify the system and make it easier to ensure that companies can claim the right R&D relief they are entitled to more efficiently.

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09 January 2024

NIC changes for the self-employed in 2024

Back in November, Chancellor Jeremy Hunt announced several changes to National Insurance Contributions (NICs) for 2024 in the Autumn Statement 2023. Not only is the rate of Class 1 contributions paid by employees decreasing by 2% in January, but NICs will also be simplified for self-employed earners later in the year. NICs are taken from employee salaries or via self-assessment for the self-employed, as a kind of tax that entitles the contributor to state benefits – including support and allowances for employment, maternity, bereavement, and retirement. Self-employed earners currently pay two NIC classes, so the reforms coming in the new tax year should be welcome news – but do they offset frozen tax thresholds? Here’s a summary of what’s changing in 2024 for the self-employed and how these NIC reforms could affect you as a self-employed worker.

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