Shropshire businesses have been warned they face a timeline of tax changes with the onset of a new financial year.
Natalie Bate is a Tax Client Manager here at DY and she says the Spring Budget had introduced several changes that business owners needed to know about.
“From April 1, the VAT registration threshold will increase by £5,000 to £90,000, and the de-registration threshold rises to £88,000.
“This increase will be welcomed by business owners, but businesses will need to keep a close eye on their figures to make sure they are still complying with the VAT thresholds.”
And the VAT changes are not the only announcement affecting the busy first week of April – a reduction in National Insurance means that employees and the self employed will see a reduction in tax.
“The NIC changes come into force on April 6 – when Class 1 employee National Insurance contributions will drop by two per cent down to eight per cent, and Class 4 self-employed NICs will also drop by two per cent to six per cent,” said Natalie.
It’s not just business owners who will be affected by changes at the start of the new financial year – home owners and investors need to take note too.
“April 6 will see the introduction of the UK ISA when a further £5,000 allowance will be available in addition to the usual £20,000 annual ISA limit, in a bid to encourage UK investments,” said Natalie.
“When it comes to selling residential properties, the higher rate Capital Gains Tax will drop from 28% to 24% from April 6, and the High Income Child Benefit Charge threshold will increase by £10,000 to £60,000.
“Families will be eligible for this benefit right up until their net adjusted income reaches £80,000 too.”
Natalie says the Spring Budget had also highlighted future changes that would come into effect from April 6, 2025.
“The furnished holiday lettings rules will be abolished and these properties will be taxed in the same way that long term let landlords are taxed – losing capital allowances, full mortgage interest relief for higher rate tax payers, and no longer qualifying as trading income.”
Natalie says non-UK domicile rules will also be replaced with a residence-based regime with a potential four-year transition period but further guidance has yet to be released.
“From next year too, the High Income Child Benefit Charge will be calculated on a combined household income basis rather than by individual salaries.
“It’s a busy time for everyone with the turn of the new financial year, and it’s important that you seek professional advice if you’re unsure of how you may be affected.”
Natalie Bate – Tax Client Manager
