The outcome from the Making Tax Digital (MTD) small business review is that MTD for income tax self-assessment (ITSA) will not be extended to those earning under £30,000 for the foreseeable future. MTD ITSA for the self-employed and landlords is to be introduced from April 2026, with the initial mandate applying to those with income […]
For employees, the national insurance cut announced in the Autumn Statement took effect on 6 January. For many years, successive governments have been happy for the public to vaguely believe that national insurance contributions (NICs) are building up in some national benefit fund, rather than representing just another tax on income. While something called the […]
A survey of 6,000 people, aged 18 to 80, revealed starkly different views on retirement across the generations. According to the Office for National Statistics, the median age of the UK population in mid-2021 was 40.7 years, up from 39.6 in mid-2011. Perhaps that gradual ageing and the impact of Covid-19 on working patterns explains […]
Minimum wage rates will see substantial increases from 1 April 2024 – welcome news for younger workers and apprentices, but not so much for those employers struggling in the current economic climate. Eligibility for the National Living Wage is to be extended by reducing the age threshold so that 21 and 22-year-olds are included. Current […]
From 2024/25, restrictions to the cash basis will be removed, making it the default method for calculating trading profit for the self-employed and most partnerships. The accruals basis is currently the default, with a business having to opt in to use the cash basis. In future, a business will need to opt out of the […]
The two existing research and development (R&D) tax relief schemes are set to merge, although the newly created scheme will be similar to the R&D expenditure credit currently claimed mainly by large companies. Although the merger will remove the complexities when companies move between schemes, there will invariably be some who significantly lose out as […]
National insurance contribution (NIC) changes for the self-employed announced in the Autumn Statement come in from 6 April 2024 and will be welcome news. But the reforms don’t go far enough to offset the continuing cost of frozen tax thresholds. NICs classes The self-employed currently pay two classes of NICs: Class 2 NICs are at […]
Highlights The main rate of class 1 employee national insurance contributions (NICs) will be reduced from 12% to 10% with effect from 6 January 2024. The main rate of class 4 self-employed NICs will be cut from 9% to 8% from 6 April 2024 and class 2 will no longer be required. Full expensing […]
The number of trusts filing self-assessment tax returns for 2021/22 was 37% lower than for 2003/04. The decline comes as no real surprise given the eroding advantages of using a trust and the recent requirement to register trusts with HMRC. Interest in possession trusts Interest in possession trusts have seen the sharpest decline since 2003/04, […]
HMRC has updated its guidance to clarify that there is no taxable benefit when an employer reimburses employees who charge their electric company cars at home. Previously, HMRC maintained that the relevant exemption did not apply. There is a general rule that no income tax liability arises where an employee is reimbursed for expenses incurred […]