As we enter the 2024/25 tax year, below is a list of key tax changes that came into effect from the 6th April 2024.
Individuals
- The personal allowance remains unchanged at £12,570. The personal allowance is the amount of income a person can earn before paying tax.
- The dividend allowance, the amount of dividends you can earn tax-free in a tax year has been reduced to £500 per tax year. This is a reduction from the previous limit of £1,000 and is a significant reduction from the £5,000 set back in 2016.
- The capital gains tax (CGT) allowance has dropped to £3,000 from the previous limit of £6,000.
- For employees, Class 1 national insurance is reduced from 10% to 8%.
- For self-employed individuals, the abolishment of Class 2 national insurance and a reduction in Class 4 national insurance from 8% to 6%.
Businesses
- The VAT registration limit has increased from £85,000 to £90,000. Also increase in the VAT de-registration limit from £83.000 to £88,000
- Changes to National Minimum Wages:
– 21 and over £11.44
– 18 to 20 £8.60
– Under 18 £6.40
– Apprentices £6.40
These changes that have come into may impact the way you withdraw your income from your business. If you have any questions, please speak to us so we can advise you.
Posted by Mark Pearson
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.