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Here is a summary of the main changes announced in the Spring Budget 2024, together with changes announced previously:

NATIONAL INSURANCE

• From 6 April 2024 the employee class 1 NIC will be reduced from 10% to 8%. Note the employer class 1 NIC remains at 13.8%.
• Class 4 NIC on self-employed profits will go down to 6% from 6 April 2024.
• For the self-employed with profits over £6,725 there will be no class 2 NI charge. For those with profits under £6,725 you can voluntarily pay class 2 NIC in order to get a year’s NI credit towards the state pension, maternity allowance etc.

HIGHER INCOME CHILD BENEFIT CHARGE (HICBC)

• From 6 April 2024 the threshold for starting to repay your child benefit will be increased from £50,000 to £60,000. The taper is going up from £60,000 to £80,000 so with total income of £70,000 you would have to repay half of your child benefit back to HMRC.
• There is a planned reform to the HICBC to move it to a household-based system where the income per the household will determine how much if any needs repaying. This will replace the current system where it is based on an individual’s income.

CAPITAL GAINS TAX

• The higher rate of capital gains on the disposal of residential properties is reducing from 28% to 24% from 6 April 2024. There is no change to the lower rate of 18%. Remember any capital  gains on the sale of a residential property needs to be declared and paid to HMRC within 60 days of the completion date.
• The annual gains exemption which is currently £6,000 will reduce to £3,000.  This is the amount of gain you can have without paying any capital gains tax.

DIVIDEND TAX

• The dividend allowance (the effective zero-rate band) will reduce from £1,000 to £500 for 2024/2025.
• The dividend rates for the 2024/2025 tax year are 8.75% (within basic rate band), 33.75% (within higher rate band) and 39.35% (in the additional rate band).

VAT

• The VAT threshold will increase from £85,000 to £90,000 from 6 April 2024. The de-registration limit is changing to £88,000.

FURNISHED HOLIDAY LETTINGS TAX REGIME

• From April 2025 the furnished holiday lettings tax regime will be abolished. This currently enables tax payers to treat the income from a furnished holiday let as a trade income and therefore get certain tax reliefs such full relief on the finance interest, more generous capital allowances on the purchase of the white goods for the property and business asset disposal and rollover relief on the sale of the furnished holiday let.

MINIMUM WAGE

Here are the minimum wage changes from 5 April 2024. As an employer you are legally required to pay these rates to your employees.

	5 APRIL 2024	5 APRIL 2023
NATIONAL LIVING WAGE (OVER 21)	£11.44	£10.42
18 – 20 YEARS OLD	£8.60	£7.49
16-17 YEARS OLD	£6.40	£5.28
APPRENTICE RATE	£6.40	£5.28

If you have any questions on this article and how it affects you and your business, please get in touch.

JLA Accounting Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by JLA Accounting Limited.