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TAX BRIEFING
WINTER BUDGET 2024
PENSIONS TO LOSE IHT EXEMPTION
At the Autumn Budget the Chancellor announced plans to remove the exemption which allows unused pension funds to be inherited tax free.
Currently, if a pension holder dies before the age of 75 their beneficiaries can generally inherit the remaining funds tax-free, whether as a lump sum or as income. If the deceased is 75 or older at the time of death, the inherited pension will be taxed at the beneficiary’s marginal income tax rate.
From April 2027, HMRC has proposed that most unspent pension pots will be subject to inheritance tax (IHT) at 40% regardless of the age of the deceased, unless the pension is passed to their spouse or civil partner.
Bringing unused pension pots into the scope of IHT will also mean that their value will count towards the IHT threshold, which the Chancellor confirmed will be frozen at £325,000 for a further two years until April 2030. Many more estates will be brought into IHT as a result of this change.
Further, if the pension holder dies aged 75 or older, the inherited pension will (as currently) also attract income tax at the beneficiary’s marginal rate. Without careful planning, this could result in a marginal rate of up to 67% if the person receiving the pension is an additional rate taxpayer.
If you have carried out succession planning based on the current rules, we recommend that you seek advice from a pensions expert or independent financial advisor if you think you may need to re-evaluate your options.
TAX BRIEFING
AUTUMN BUDGET 2024
EMPLOYER’S NATIONAL INSURANCE HIKE
The Chancellor has announced that the main rate of secondary Class 1 national insurance contributions (NIC) for employers will increase by 1.2 percentage points from 13.8% to 15% from April 2025
The Class 1A and Class 1B employer rates (relating to benefits) will also increase in line with this.
As well as the rate increase, the earnings threshold above which employer’s national insurance is payable on an individual’s earnings will be slashed from £9,100 to £5,000 per annum. This means that an extra £4,100 per employee will be subject to employer’s NIC at 15%.
To soften
TAX BRIEFING
AUTUMN 2024
RTI REPORTING CHANGES DELAYED
HMRC has delayed planned changes to real-time information (RTI) reporting requirements for employee hours worked.
Draft legislation was published in May aimed at improving the range of data collected by HMRC.
The proposed changes will require businesses to provide more detailed information to HMRC via self assessment (SA) and PAYE RTI returns in three main areas:
• start and end dates of self-employment;
• dividend income received by shareholders in owner-managed businesses; and
• employee hours worked.
Summer Tax Briefing 2024
CASH BASIS BY DEFAULT
Spring Tax Briefing 2024
STUDENT LOANS AND BASIS PERIOD REFORM
New guidance from HMRC confirms that profits used to assess student loan repayments and entitlement to student finance will include transitional profits from basis period reform.
Student loan repayments for self-employed taxpayers are based on the profits reported in each tax year. For the tax years 2023-24 to 2027-28 this will be your normal profit plus the portion of the transitional profits you decide to bring into that year. The additional profit could cause a dramatic increase in your student loan repayments in one or all of the five years.
Spring Budget 2024
NATIONAL INSURANCE RATES CUT AGAIN
The headline news from the Spring Budget was further cuts to national insurance contributions (NIC) of 2% each for self-employed taxpayers and employees.
The main rate of primary Class 1 NIC paid by employees on earnings between £12,570 and £50,270 per year will be cut from 10% to 8% from 6 April 2024. Combined with the 2% cut announced in the Autumn Statement 2023, this will save the average worker earning £35,400 over £900 a year.
TAX BRIEFING – Winter 2023
The Chancellor has announced cuts to national insurance contributions (NIC) for self-employed taxpayers and employees.
The headline news from the Autumn Statement was the reduction of primary Class 1 and Class 4 NIC and the removal of compulsory Class 2 NIC.
TAX BRIEFING – SUMMER 2023
TAX BRIEFING
Occasionally you may reward your employees with something special such as a holiday or a hamper. If the value exceeds the tax-free amount permitted under the rules for say long service awards, trivial benefits or staff suggestions it will be taxable.
BUDGET BRIEFING – SPRING 2023
TAX BRIEFING
Last Autumn the Chancellor cut the enhanced deduction for expenditure by SME companies on R&D projects from an extra 130% to 86% and the payable tax credit from 14.5% of the loss surrendered to 10%.
TAX BRIEFING WINTER 2022
TAX BRIEFING
Dividends are taxed at much lower rates than other forms of income and they are not subject to national insurance contributions (NIC).
AUTUMN BUDGET 2022
TAX BRIEFING
INCOME TAX CUTS NEXT YEAR
In last week’s Budget the Chancellor stunned his audience by announcing that both the basic rate of tax and the highest ‘additional’ rate would be reduced from 6 April 2023
Autumn 2022
TAX BRIEFING
COST OF TRAVELLING TO WORK
We can help you ensure that any assistance given to your employees meets the tax legislation requirements. Travelling to the workplace may now be unaffordable for some employees but employers who help by reimbursing travel expenses could be creating an extra tax burden for themselves and their employees.
SUMMER 2022
TAX BRIEFING
CHANGING NIC IN JULY
The rates for national insurance contributions (NIC) increased by 1.25 percentage points for everyone on 6 April 2022. From 6 July the NIC starting threshold will rise to £12,570 per year (£1,048 per month) for employees.
Spring 2022
TAX BRIEFING
For VAT periods starting on and after 1 April 2022 all VAT records must be recorded digitally and returns must be submitted under the Making Tax Digital (MTD) regime
December 2021
TAX BRIEFING
November 2021
AUTUMN BUDGET 2021
along with the other national minimum wage rates (see table). Since 6.4.21 the NLW rate has applied to
workers aged 23 and over.
June 2021
BUSINESS RATES ON EMPTY PROPERTIES
March 2021
CORPORATION TAX COMPLEXITY
September
TAX BRIEFING
Whether your business buys a car or a van can make a big difference to the tax relief given on the cost of the vehicle and to the tax payable by the driver who uses it for private journey
June
TAX BRIEFING
If you are self-employed and your business has been adversely affected byCOVID-19 you may be eligible to claim a grant from HMRC of up to £7,500.
March
TAX BRIEFING – BUDGET
Stamp duty land tax (SDLT) is payable on the purchase of property in England and Northern Ireland; Scotland and Wales levy their own taxes for property purchases in those countries
February
TAX BRIEFING
CGT has normally been payable by 31 January after the end of the tax year in which the contracts are exchanged but for residential sales exchanged on or after 6 April 2020 any CGT due will be payable within 30 days of the completion date.
December
TAX BRIEFING
September
TRADING AND MISCELLANEOUS INCOME
June
Paying the right NIC
March
Employee Benefits
Winter 2018
Gains from off-plan purchases
Autumn Budget 2018
Entrepreneurs’ relief curtailed
Autumn 2018
MTD: What, when and how
Summer 2018
Time to choose childcare support
Spring 2018
Paying your child from the business
Winter 2017
Simple assessments have arrived
Autumn Budget 2017
Diesel bad, electric goodish
Diesel cars tend to have lower CO2 emissions than petrol-powered vehicles of a similar engine size. However, diesels also emit more harmful particles, so a diesel supplement is added to the percentage of list price to increase the taxable benefit of using a diesel company car.
