Date posted: 11th Dec 2023
As we near the end of 2023, we thought it may be appropriate to re-cap some of the main tax changes for 2023.
Our initial thoughts were to do this as an advent calendar, but advent calendars are usually exciting and contain a surprise and the marketing team didn’t think that our readers will find a tax advent calendar as exciting as the tax team would!
Corporation Tax
April 2023 saw the introduction of the 25% corporate tax rate with the need to consider associated companies, when calculating the tax due, read more here.
In addition, the changes may impact the tax payment dates and you may need to pay corporate tax on a quarterly basis, find out more here.
The increase in the main rate of corporation tax rate meant the end of the super deduction but the introduction of full expensing.
Research and Development (R&D)
HMRC continue to change the reporting requirements around R&D and cut the relief that could be claimed by SME companies.
In addition, from April 2024, as we expected, the SME and large companies schemes will be merged into one scheme. This was announced at the 2023 Autumn Statement.
Capital gains tax
There was an extension to the time limits to allow divorcing couples to sort their tax affairs. Whilst it is a sad time when a marriage comes to an end, it is important not to overlook the tax implications of transferring assets between separated spouses, you can find out more here.
There were changes in respect of capital gains tax allowances and reporting requirements, which you can read more about here.
The capital gains tax allowance will be further cut to £3,000 from 2024/25.
Income tax
Like late November / early December, most of the thresholds and allowances were frozen despite ever increasing inflation. The point at which the additional rate tax rate starts (45% for earned income) reduced from £150,000 to c£125,000, from April 2023, as the government looks to continue to raise stealth taxes.
The rising interest rates are likely to mean that savers are earning more interest on their savings but this is likely to mean that those savers may have to pay tax on the interest income.
In April 2024, those individuals with dividend income will only be able to receive £500 of dividend income, without creating a tax charge.
National insurance
It was announced at the 2023 autumn statement that there would be reductions in national insurance for employees and self employed individuals.
In addition, a tax tribunal outcome could allow employer’s the chance to reclaim some national insurance where they give employees a car allowance, read more here.
VAT
The main VAT change was the introduction of a new penalty system. Keep up to date with VAT changes here.
Pensions
There was some good news for those saving into pensions announced at the 2023 Budget with increased thresholds.
Our team
Our tax team continued to grow and develop across all four offices.
Gary Hughes joined the firm as a tax manager and there was exam success when three of the team passed chartered tax adviser exams. Well done again to Ben Bramwell, Kane Henderson and Yana Jones-Hinkley. In addition, long serving senior tax manager, Elizabeth Layfield added to her chartered accountancy and chartered tax qualifications with the prestigious STEP qualification.
Summary
After another eventful year from a tax perspective, it will be interesting to see what 2024 brings, especially with a general election on the horizon.
No doubt tax will feature in all parties’ manifestos and promises will be made to cut taxes in the future. If there are further changes, we will advise you on those changes through our monthly tax news or in-person updates.
Thanks for reading our tax news and from the Clive Owen LLP tax team – all the best for 2024 – please wish us luck for the self assessment deadline!
If you have any queries, contact us here.
