BRIEF HIGHLIGHTS OF TAX AND NATIONAL INSURANCE CHANGES:
National Insurance:
Employees:
- Main rate of Class 1 NICs to be cut from 12% to 10% from 6 January 2024.
Self-Employed:
- Class 2 NICs no longer compulsory to pay from April 2024. For entitlement to state benefits etc, voluntary payments can still be made if profits are less than £6,725.
- Class 4 NICs rate will be cut from 9% to 8% from April 2024.
Employers:
- No changes to threshold level or rate of Employer NICs.
Tax and allowances:
- No changes to the Pension contribution Annual Allowance, remains at £60,000 per tax year.
- Personal Income Tax and National Insurance contributions thresholds, remain fixed at their current rates until April 2028.
- National Living Wage to increase from £10.42 an hour for age 21 and over to £11.44 from 1 April 2024.
- NMW rates to apply from April 2024:
>18 to 20 year olds from £7.49 to £8.60 per hour
>16 to 17 year olds from £5.28 to £6.40 per hour;
- No changes to the previously notified Dividend Allowance that is to be reduced to £500 from April 2024.
- No changes to the previously notified Capital Gains Tax Annual Exempt Amount that is to be reduced to £3,000 from April 2024.
- No change to Corporation Tax rates from 1 April 2024:
>19% for taxable profits below £50,000 (small profits rate)
>25% for taxable profits above £250,000 (main rate)
Marginal Relief available to be tapered between the small profits rate and the main rate.
- 100% Capital Allowance first year tax relief (in addition to current AIA allowances) for Limited Companies only, now made permanent.
- Special rate expenditure first year allowances of 50% for Limited Companies only, also made permanent.
- No changes to IHT thresholds or rates.
- No changes to ISA limits or taxation of savings.
- Van and Fuel benefit amounts to remain fixed at 2023/24 rates for 2024/25.