Date posted: 26th Mar 2024
We now head into another new tax year (from 6 April 2024) and financial year (from 1 April 2024).
With a new year, brings new changes to tax rates and allowances and there are a number of tax changes, that you need to be aware of.
Dividend income
Those individuals receiving dividend income will only be able to receive £500 of dividend without paying tax on that income.
Interest income
Whilst the savings allowances have not changed (see below), it is likely, due to increased interest rates that savers will potentially have more interest income which is subject to tax.
A basic rate taxpayer – someone with total income (including the interest) of c£50,000 or less – will be allowed to receive £1,000 of interest without suffering tax. If the interest received goes over that allowance, they will need to make a notification to HMRC.
A higher rate taxpayer – someone with total income (including the interest) of c£125,000 or less – will be allowed to receive £500 of interest without suffering tax. If the interest received goes over that amount, they will need to make a notification to HMRC.
There is no allowance for those that earn over c£125,000, which means that any interest earned is taxed in full and will need to be notified to HMRC.
Capital Gains Tax allowance
The sale of a capital assets (rental property, shares etc) will attract capital gains tax.
The amount of gain that can be made tax free, is reducing to £3,000 from £6,000.
Capital gains tax rates
These will remain the same as 2023/24 apart from that the highest rate of capital gains tax payable on the sale of residential properties will decrease from 28% to 24%.
Child benefit tax charge
Child benefit is currently repayable if a household receives child benefit and one member of the household earns over £50,000. There is a tapering of the charge on income between £50,000 and £60,000.
This initial threshold increases to £60,000 from 6 April 2024 and the tapering band is to be between £60,000 and £80,000.
Those that may have stopped receiving child benefit due to their level of earnings, may need to reconsider whether the benefit should be claimed again.
National insurance
NIC payable by employees and the self employed will reduce from 6 April 2024.
Research and Development Tax relief
For companies, the new financial year from the 1 April 2024 means that there is a change to the level of R&D tax relief support that they will receive from HMRC. The RDEC and SME schemes will be merged into one scheme resulting in a lower level of support for R&D activities post 1 April 2024.
VAT
The VAT registration threshold rises from £85,000 to £90,000 from 1 April 2024. The deregistration threshold will rise from £83,000 to £88,000.
As ever, we are here to help and if you have any queries, please give us a call.
