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Navigating the Changes to Capital Gains Tax (CGT)

April 2024 saw significant changes to Capital Gains Tax (CGT), marking a pivotal moment for property investors and homeowners. These adjustments, announced in the Spring Budget, aim to reshape property investment. Whether you’re a seasoned investor or a first-time buyer, understanding these shifts is important for confidently navigating the market and making the most of opportunities. Let’s review the changes and explore how they might affect you.

What is Capital Gains Tax?

Before delving into recent changes, it’s essential to grasp the basics of Capital Gains Tax (CGT). CGT is applied to the profit gained from selling an asset that has appreciated. Unlike other taxes, CGT focuses on the gain rather than the total proceeds of the sale. Understanding CGT is important because it directly impacts the amount you get post-sale. 

Key changes in CGT rates

Property owners and investors need to be well-informed about the latest changes to Capital Gains Tax (CGT). Understanding these adjustments can significantly impact your financial decisions and tax liabilities. Here’s a summary of what’s changing:

  • Lowering of higher rate CGT on UK residential property disposals: To boost activity in the residential property market, the Government is lowering the higher rate of CGT on UK residential property disposals from 28% to 24%, effective from the 6th of April, 2024. The lower rate remains unchanged at 18%. This move aims to encourage earlier sales of second homes and buy-to-let properties to increase transaction volumes and inject vitality into the housing sector. Individuals, trustees, and personal representatives involved in residential property transactions are affected by this change.
  • Key changes to CGT allowances and annual exemption amount: There are some important changes to Capital Gains Tax (CGT) allowances. Starting from April 2024, the CGT annual exempt amount is dropping from £6,000 to £3,000. This affects individuals, personal representatives, and trustees for disabled people. Other trustees for the 2024/2025 tax year will have an annual exempt amount of £1,500. 
  • Impact on Furnished Holiday Lets (FHLs): Owners of Furnished Holiday Lets (FHLs) should pay close attention to the changes. While the top capital gains tax rate on the sale of residential property is reduced to 24%, the beneficial tax treatment for FHLs is set to be abolished from April 2025. 

What it means for you

For individuals involved in residential property transactions, the reduction in the higher CGT rate offers a welcome opportunity for potential savings. With the higher rate now set at 24%, there may be more flexibility in managing your finances following the sale of a property. This change eases the tax burden for those handling property transactions, providing more breathing room in financial planning.

If you own an FHL, it’s important to look at your situation and consider your options. 

Navigating the new terrain

In light of these changes, property owners and investors should review their portfolios and tax strategies. Whether you’re planning to buy, sell, or hold onto property assets, understanding the evolving landscape of CGT is key to optimising your financial outcomes. Stay informed, seek advice, and adapt your approach to navigate the shifting terrain of Capital Gains Tax effectively.

Connect with experts

If you’d like some guidance with understanding what’s involved in property investments amidst these CGT changes, our experts are here to help. Contact us today on 01603 630882 or fill out our contact form for personalised help tailored to your needs. 

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What you need to know about the Spring Budget 2024

It’s the time of year again when the Chancellor of the Exchequer has unveiled the much-anticipated Spring Budget, outlining the Government’s plans for taxation and spending. Let’s dive into the highlights of the 2024 Budget to help you understand what it means for you.

National Insurance Cuts

One of the headline announcements in this year’s Budget is the reduction in the main rates of National Insurance contributions (NICs) for both employees and the self-employed. Effective from April 2024, the Class 1 employee NICs will see a significant cut from 10% to 8%, while Class 4 employee NICs will drop from 8% to 6%. This move aims to put more money back into the pockets of workers and self-employed individuals.

High-Income Child Benefit Charge (HICBC)

Families across the UK will welcome the changes to the High Income Child Benefit Charge (HICBC). The threshold for HICBC will rise from £50,000 to £60,000 starting in April 2024. Also, the rate at which this charge is applied will be halved, making sure that Child Benefit is not entirely withdrawn until individuals earn £80,000 or more. These changes give families some relief while ensuring that benefits are taken away more fairly.

Taxation of Non-Doms

A big change in the Budget is the end of the tax rules for those not from the UK (‘non-doms’). From April 2025, a new residence-based tax regime will be introduced, making sure that all UK residents pay the same tax on their foreign income and gains after living in the UK for over four years. This move aims to simplify the tax system and promote fairness for everyone living here.

Capital Gains Tax and Stamp Duty Land Tax

Great news for property owners. The Budget is cutting the higher rate of Capital Gains Tax for selling residential properties from 28% to 24% starting in April 2024. And if you’re into buying multiple properties, get ready because Multiple Dwellings Relief in the Stamp Duty Land Tax system is being axed from June 2024. These changes are all about boosting the property market and encouraging people to invest.

Furnished Holiday Lettings

For landlords, changes are on the horizon concerning furnished holiday lettings. From April 2025, the Government will end a tax advantage for landlords who let short-term furnished holiday properties over those who let residential properties to longer-term tenants. This aims to create a level playing field in the rental market.

Fuel Duty and Alcohol Duty

Good news for motorists and drinkers alike – not to be done at the same time, obviously! Fuel duty will remain frozen for another year, extending the temporary 5p cut and making sure that duty rates are not increased with inflation. Similarly, alcohol duty will be frozen from August 2024 until February 2025, providing relief for consumers.

Tobacco and Vaping Duties

In a bid to incentivise healthier choices, a new duty on vaping products will be introduced from October 2026. Tobacco duty will be increased from the same date, maintaining the financial incentive to choose vaping over smoking.

Air Passenger Duty and VAT Threshold

Passengers flying premium economy class, business, and first class, and those travelling by private jet, will see increased rates in Air Passenger Duty from 2025/26 to account for recent high inflation. What’s more, the VAT threshold will be increased from £85,000 to £90,000 in April 2024, providing relief for small businesses.

Energy Profits Levy and Household Support Fund

The Energy Profits Levy, introduced in response to the rise in oil and gas company profits, will be extended to 2028/29. Also, the Household Support Fund, aimed at helping those most in need with rising costs of living, has been extended to September 2024.

Spring Budget 2024: A Diverse Mix of Tax Measures

The Spring Budget 2024 presents a mixed bag of tax measures and announcements aimed at encouraging economic growth, supporting families, and ensuring the tax system is fair for everyone. From cuts in National Insurance contributions to reforms in property taxation and incentives for healthier choices, the Budget sets the stage for a more inclusive and fruitful future. As these changes occur, it’s important to remain up-to-date and adjust to the shifting world of taxes and government spending.

Get Expert Guidance

If you’re eager to optimise your tax strategy, don’t miss out on this chance to make a difference. Reach out to us today for expert advice and support. Whether you prefer a personalised phone call or the convenience of filling out our user-friendly online form, we’re here to help you every step of the way. Call 01603 630882 now to connect with our team or simply complete our online form to kickstart the process. Let’s work together to transform your tax strategy into a powerful catalyst for growth post-budget and beyond. 

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How the 2024 Paternity Leave and Pay Amendments Benefit UK Families and Employers

We’ve got some exciting news to share that will make a difference to families and employers across the UK. The government has recently announced some big changes to Paternity Leave and Pay, set to come into effect from the 8th of March, 2024. These amendments aim to provide more flexibility and support for fathers and partners while also offering advantages for employers. So, let’s dive in and explore how these changes will benefit everyone involved.

Flexibility for Fathers and Partners

One of the key changes is that paternity leave no longer has to be taken in one consecutive block of one or two weeks. Instead, dads and partners now have the flexibility to split their leave into non-consecutive blocks, giving them greater control over their time off. This means they can better accommodate the changing needs of their family while still taking the time needed to bond with their new baby. Whether it’s attending doctor’s appointments, helping with childcare, or simply being there to support their partner, this new flexibility means that fathers and partners can be more present and engaged during this important time in their family’s life.

Reduced Notice Period

Another big change is the shorter notice period for taking Paternity Leave. Before, employees had to give their employers more notice. But now, dads and partners only need to give four weeks’ notice before taking leave. This makes it easier for them to decide when to take time off, helping them to better adjust to their family’s needs with less stress during a busy and emotional time.

Support for Early or Premature Births

The changes also provide support for families when babies arrive earlier than expected. If dads and partners’ babies are born prematurely or before the 6th of April, 2024, they can still receive Statutory Paternity Pay (SPP) under the new rules. This safety net means that families can access the financial support they need, offering peace of mind when things don’t go as planned.

Transitional Guidance for Employers

With changes to Paternity Leave and Pay, employers need to know what to do. Even though HMRC’s PAYE payroll software will be updated by the 6th of April, 2024, employers may face the issue of babies born before this date. They’ll need to work out how to get back any payments made for Paternity Leave under the new rules before the software is updated. This means they’ll need to plan carefully and take action to follow the rules.

Claiming Repayment

If employees take Paternity Leave before the 6th of April, 2024, employers can recoup the money they paid, whether it was one long period or two shorter ones. Also, small and medium-sized businesses that are struggling financially can ask for an advance payment to cover these costs.  Businesses can then focus on their employees’ well-being without worrying about money.

Benefits for Families and Employers

So, what does all of this mean for families and employers? It means that new parents receive an added layer of flexibility and support during a challenging period of adjustment. By being able to split Paternity Leave into separate parts and with reduced notice requirements, families can better juggle the demands of work and caring for their new arrival. This flexibility can significantly ease the stress and pressures of balancing work and family responsibilities.

For employers, these changes demonstrate a commitment to prioritising the well-being of their workforce. By providing clear guidance on navigating these changes, employers show they value their employees’ needs and are willing to support them during important life events. This can create a positive work environment and contribute to employee satisfaction and loyalty. Overall, these changes benefit both families and employers by promoting a healthier work-life balance and creating a more supportive workplace culture.

Building a More Inclusive and Supportive Society

The 2024 Paternity Leave and Pay changes benefit everyone involved. With these amendments, dads and partners gain increased flexibility in managing their time, allowing them to be more present for their families during important moments. Meanwhile, employers benefit from streamlined processes that make it easier to support their employees through big life events. This demonstrates a genuine commitment to encouraging a healthy work-life balance and ensuring families receive the support they need.

Ask an Expert

To find out more about the new Paternity Leave and Pay changes, reach out to us on 01603 630882 or fill out our online form. Our expert team will be happy to help you get the ball rolling. Let’s ensure families and employers reap the rewards of these positive updates. Start your journey to increased flexibility today.

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Springing into Energy Savings: A Dive into the Latest Trends

The cost of living crisis has affected most of us, especially when it comes to our energy bills, but as we enter Spring the energy landscape is presenting some unexpectedly warm news for consumers and businesses alike. In our latest blog post, we dive into the latest trends in the energy market brought to you by our trusted partner Indigo Swan, that are shaping a positive outlook for the months ahead. 

Lower Prices on the Horizon

Firstly, something that has everyone talking is that gas and electricity prices are finally taking a little dip. After what feels like ages watching those numbers go only one way (up, of course), we’re seeing a bit of a break. It’s like a little ray of sunshine for both our wallets and our spirits. This shift comes after a bit of a rollercoaster ride, with all those ups and downs driven by world events, and even the weather playing its part. But it looks like the energy market is bouncing back and giving us a bit of relief with lower prices. It’s a breath of fresh air and a nudge in a happier direction for what’s to come in the energy world.

A Well-Stocked Europe

Turning our focus to Europe, you’ll be pleased to hear that their gas storage tanks are looking strong, currently at a solid 79% capacity. That’s a big jump from where they stood in 2022, and they’re even surpassing last year’s levels. With such ample storage capacity, Europe is gearing up for spring with confidence, knowing they have plenty of gas reserves to rely on. 

The Winds of Change and Connectivity

Now, let’s talk about electricity. Gas has been pulling some serious weight, making up a whopping 50% of our generation lately, especially since wind power has been taking a bit of a breather. But hold onto your hats, because things are shifting, due to the Viking Link Interconnector with Denmark being a game-changer. This smart connection has been zipping energy back and forth between nations, and there have even been days when we’ve sent more electricity over to Europe than we’ve received. It just shows how interconnected and resilient our energy setup is.

​​The Global Stage and Its Local Impacts

Taking a look at the big picture, recent tensions in the Middle East, especially the situation in Gaza, could shake things up a bit in the world of gas and oil supplies. But, it’s not all doom and gloom. The steady stream of LNG deliveries and the proactive efforts of different countries to secure shipping routes through the Suez Canal have helped ease some of those worries. This whole situation drives home the point that what’s happening on the global stage can have a direct ripple effect on our local energy markets and what we pay at the pump.

Empowering Customers in Uncertain Times

Given these developments, Indigo Swan recommends that customers, particularly those whose contracts are wrapping up in early 2024, take a moment to reassess their positions. With the current market conditions presenting a positive landscape, now might just be the perfect time to lock in some more preferred energy contracts, making use of those lower wholesale prices. Also, with the switch from the Energy Bill Relief Scheme to the Energy Bills Discount Scheme back in April 2023, there are even more options available for customers to navigate their energy costs with skill, despite the changes in levels of support. It’s all about being savvy and making the most of the opportunities at hand.

The Forecast: Cautious Optimism

As we look to the future, there’s a sense of cautious optimism in the air. With wholesale prices dipping, storage levels sitting comfortably high, and exciting infrastructure projects like the Viking Link in the works, things are looking pretty promising for the energy market. But, and it’s a big but, we can’t ignore the fact that global events have a knack of throwing us curve balls when we least expect it. That’s why it’s important to stay vigilant and take a proactive approach to managing our energy contracts. Being prepared is key to weathering any storm that comes our way.

Your Partner in Navigating Energy Trends

At Norwich Accountancy, we’re more than just number-crunchers; we’re your trusted guides through the maze of energy markets. Our dedication to providing you with top-notch insights and advice never wavers. Whether you’re navigating the ins and outs of the Energy Bills Discount Scheme or plotting your next contract move, we’ve got your back, helping you make smart decisions that move your business forward.

As we keep a close eye on the energy landscape, we urge you to stay engaged, informed, and proactive. The current trends present a golden opportunity for cutting costs and crafting strategic plans. 

If you want to take control of your energy costs and make savvy decisions for your business, get in touch with Indigo Swan. Let’s work together to unlock savings and secure a brighter energy future for your company. 

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Guidance on Selling Online and Paying Taxes

If you’ve ever dabbled in selling goods or services through an online marketplace in the UK, this blog is for you. We’ll break down the ins and outs of paying taxes on your online earnings in an easy-to-follow way so you can confidently navigate the tax world.

Understanding the Basics: Are You Trading or Making a Capital Gain?

First things first, when paying taxes on your online sales, you need to determine whether you’re trading or making a capital gain.

  • Selling Unwanted Items: If you’re just clearing out your attic or garage and selling personal possessions you no longer need, you’re probably not considered a trader. For example, if you’re like Sally, who sold some items from her attic for about the same price she bought them, you likely won’t have to pay tax on those sales.
  • Buying for Resale: On the flip side, if you’re actively buying items intending to sell them at a profit, like Josh, who hunts around car boot sales and charity shops, you’re in the trading game, and those profits are taxable.
  • Creating and Expanding: Now, if you’re like Gina, who started by making greeting cards for friends and family but expanded to sell them online with the intent of making a profit, you’re likely considered a trader. Gina’s profits would be subject to tax because she’s running her activities like a business.
  • Collecting with Purpose: Even collectors like David, who buys and sells model cars to complete sets for profitable resale, are often classed as traders because they’re buying and selling for profit.
  • Importing for Profit: If you’re importing goods like Steve and selling them online for a profit, you’re probably trading, too.
  • Offering Services: And then there’s Adam, who offers online language tuition. If you’re promoting and organising your services like a business, it’s likely considered trading, and you’ll need to pay taxes on your earnings.

Trading and Miscellaneous Income Allowance

Now, here’s a little ray of sunshine for those of you with a small online income. If your total earnings from online trading or providing services amount to less than £1,000 (before expenses) in a tax year, you won’t need to inform HMRC or pay any tax on the profits. This is thanks to the Trading and Miscellaneous Income Allowance. So, if you’re just getting started or selling on a smaller scale, you have some breathing room.

The Role of Online Marketplaces

In recent years, tax regulations have evolved to adapt to the digital age. From the 1st of January, 2024, digital platforms, like websites and mobile apps, have been required to collect and report seller information and income to HMRC. They must report this information by January 2025, in line with international agreements.

So, what does this mean for you as a seller? You’ll receive a copy of this information, which can help work out your income and expenses incurred through these platforms. This data can help you calculate whether you owe any tax on your profits.

Registering and Paying Taxes

If you have to pay taxes on your online earnings, you might wonder how to get started. Well, it’s not as daunting as it may seem.

  • Self Assessment Tax Return: For starters, if you’ve never declared income through a Self Assessment tax return, you’ll need to register. Don’t worry; it’s a straightforward process, and you can find all the information you need on the HMRC website.
  • Using the HMRC App: Once registered, you can easily check what you owe and pay your Self Assessment bill using the HMRC App. It’s available for both iOS and Android devices, making it super convenient.

Mastering Online Sales: Navigating Taxes with Confidence

In a nutshell, selling goods or services online can be a great way to earn extra income, but it’s important to be aware of your tax obligations. Whether you’re selling vintage treasures, crafting homemade goods, or providing services, it’s important to understand when you need to pay taxes.

Remember, if you’re selling a few items here and there for a bit of pocket money, you may not need to worry about taxes. But if you’re actively trading and making a profit, it’s time to consider your tax responsibilities.

Stay informed, keep track of your income and expenses, and make good use of the information provided by online marketplaces.  If you’re unsure about your tax situation, it’s a good idea to consult a tax professional who can provide personalised guidance.

Selling online can be rewarding, and with a bit of tax knowledge under your belt, you can navigate this digital marketplace confidently. Happy selling, and remember to pay your taxes on time.

We’re here to help
If you’re ready to take control of your online business taxes, give us a call today on 01603 630882, or take a moment to fill out our online form. Let’s make sure your online ventures are tax-savvy and hassle-free. Your financial peace of mind is just a call or click away.

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An Overview of the Housing Market in 2024

2024 is shaping up to be an exciting year for anyone interested in buying, selling, or investing in property. With guidance from Pymm & Co, a reputable estate agency that provides valuable insights and expert guidance in the property market, we’re here to give you a helpful overview of what’s going on in the housing market and share some valuable insights when it comes to property this year.

The Housing Market is Bouncing Back

Great news – the housing market is making a remarkable comeback after a bit of a rollercoaster ride. More and more people are getting into the property game thanks to increased activity, affordable housing options, and a boost in confidence among both buyers and sellers. One big reason for this recovery is the expected drop in interest rates later in 2024, making mortgages more attractive with competitive long-term fixed rates popping up.

Hello, First-Time Buyers!

First-time buyers are making a strong comeback in the housing market. High rental prices are pushing people to invest in their future by becoming homeowners. This is a promising sign for the market, highlighting more diverse participation and a lively exchange of properties.

Checking Out Norfolk: A Case Study

Let’s take a closer look at Norfolk’s housing market. Last Boxing Day, there was a significant increase in property listings, almost double the previous year. This surge in properties to pick from is fantastic for potential buyers. Our partners at Pymm & Co. saw a 5% boost in sales in 2023, with a big spike in the last quarter.

Navigating Neighbourhood Trends

In this ever-evolving housing landscape, paying attention to neighbourhood trends is a good idea. Certain areas may experience a surge in popularity due to factors such as new infrastructure developments, proximity to employment hubs, or emerging cultural scenes. Keeping your finger on the pulse of these trends can help you make informed decisions that align with your lifestyle and investment goals.

Sustainability and Smart Homes

The housing market is also witnessing a green revolution. Sustainability is not just a buzzword; it’s a driving force in property choices. Energy-efficient homes, solar panels, and smart home technology are becoming increasingly attractive. These features not only reduce your carbon footprint but can also save you money on utility bills and improve your quality of life. So, consider how eco-friendly options align with your values and long-term plans when exploring the market.

Disclaimer: This content on property auctions below isn’t financial advice, so if you’re interested in a property auction, you should seek professional advice before an auction begins. This content shouldn’t be used against its author or Pymm & Co. in any legal repercussions around a property auction purchase.

Pros and Cons of Property Auctions

Property auctions in 2024 have some great perks. They can be super fast, so you can get the property you want quickly. Plus, you might find amazing property deals at good prices, which is perfect if you want to invest in property. But, there’s a catch. Property auctions can be tricky. You need to be ready and know what you’re doing, so do your homework before you raise your hand on auction day. 

Getting Ready for Property Auctions

As we’ve mentioned, preparation is the name of the game for property auctions. You must do your homework, secure your finances in advance, plan your bidding strategy, and understand all the ins and outs of auction participation. This includes registering with the necessary ID and funds, being aware of auction house fees, and diving into those legal property packs. Also, don’t forget to do your due diligence with property inspections, title searches, and understanding market values.

Bidding Strategies and Renovations

Setting a budget and sticking to it is your secret weapon to avoid overspending at auctions. And if you’re looking to renovate auction properties for profit, make sure your plans align with market demand, not just your personal taste.

What’s Ahead for the Housing Market

Looking forward, the housing market in 2024 is a mix of optimism and caution. Interest rates are expected to drop, making the market more accessible, but staying informed is key. For auction enthusiasts, research remains your best friend. Always analyse every detail from the vendor and auction house to make smart decisions.

Why Consider Moving in 2024?

There are plenty of reasons to consider making a move this year. The housing market is on the mend, offering more affordable options. Anticipated lower interest rates and a variety of long-term fixed-rate mortgages make it a prime time for securing a mortgage. Plus, the increase in property listings, as seen in Norfolk, means more choices for buyers. The return of first-time buyers to the market is heartening, as it brings stability and growth.

Seize the Opportunities

This year’s housing market is full of opportunities, with a recovering economy, improved mortgage conditions, and renewed confidence among buyers and sellers. Whether you’re a newbie or a seasoned pro, there’s something for everyone. But remember, being well-informed is key, especially in areas like property auctions and renovations.

Let’s Make It Happen Together

If you’re ready to dive into the housing market and need help navigating Capital Gains Tax, call us today on 01603 630882 or fill out our contact form. Our expert team is here to guide you whether you’re buying, selling, or investing. Let’s unlock your property potential together! 

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What is the personal tax allowance for 2023/24

As we are now well into the 2023/24 tax year, some of the biggest questions on many people’s minds are around personal tax allowance (PTA) – how much is it, and how does it impact me as a UK taxpayer? Let’s delve deep into understanding the PTA for 2023/24.

Personal Tax Allowance: An Overview

The personal tax allowance is a threshold set by the UK government under which an individual doesn’t have to pay any income tax. It’s a specific portion of your income that you’re allowed to earn tax-free each year. Any amount earned over this allowance is subject to taxation at the stipulated rates.

Although you may not be required to pay tax under the personal tax allowance, keep in mind that you may still be required to submit a tax return. 

Personal Tax Allowance for 2023/24

For the tax year 2023/24, the personal tax allowance is £12,570. 

This essentially means that if your annual income is up to £12,570, you won’t have to pay any income tax. However, for income exceeding this threshold, the excess amount is taxable. Depending on the tax band you fall into, you’ll be charged at different rates.

Tax Bands for 2023/24:

  1. Basic rate: If your income is over the PTA but under £50,270, the excess amount is charged at 20%.
  2. Higher rate: If your income is between £50,271 and £125,140, the excess over £50,271 is taxed at 40%.
  3. Additional rate: If your income exceeds £125,140, anything over this amount is taxed at 45%.

Remember, these rates apply to your income over the PTA, not your total income. 

Income over £100,000

One point to keep in mind is the income limit of £100,000. If your adjusted net income exceeds this amount your PTA will be reduced. For every £2 of income over £100,000, your allowance is reduced by £1. Therefore, the allowance may be nullified entirely if your income is considerably above this threshold. This means your allowance is zero if your income is £125,140 or above. 

Special Circumstances

There are several circumstances where your Personal Allowance may be higher.

  1. If you claim Marriage Allowance you can transfer £1,260 of your personal allowance to your husband, wife or civil partner. This reduces their tax by up to £252 in the tax year. Find out more.
  2.  Blind Person’s Allowance is an amount added to your yearly personal allowance. For 2023 to 2024, it’s an additional £2,870. Find out more

Tax Bands Frozen until 2028

The PTA historically was increased annually to account for inflation and ensure that most low-income individuals remain tax-free. However, the personal allowance has remained the same for three years in a row. 

In 2021, it was announced the allowance would be frozen at £12,570 from the 2021/22 tax year, through to April 2028. Also, the additional rate threshold was lowered and again frozen from £150,000 to £125,140 from April 2023. 

These measures mean that, as wages rise, people will pay tax on a larger proportion of their earnings, and more people will move into higher tax brackets, potentially raising £25.5bn more a year in tax by 2027-28.

Know your limits

The personal tax allowance is a cornerstone of UK tax policies, ensuring that low to middle-income individuals are not unduly burdened by taxes. It’s essential to be aware of the thresholds and understand their implications on your tax liabilities, especially with tax bands now being frozen.

As always, while this blog post offers a general overview of the personal tax allowance for 2023/24, individual circumstances can vary. To get a tailored understanding of how PTA impacts your finances, don’t hesitate to get in touch. Remember, efficient tax planning is key to maximising your hard-earned money. Stay informed, plan ahead, and ensure you make the most of any allowances and reliefs available.

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What is a SA302 form?

If you’ve ever sat down to sort out some tax matters or tried getting a loan, you might have heard about the SA302 form. If you’re feeling a little lost, read on for our simple guide to the what, why and when of the SA302 form. 

What is the SA302?

An SA302 form is a tax calculation produced by HMRC for those who file a Self-assessment tax return. It details your income for a particular tax year and the tax that you owe or are due. Think of this as a report card that shows your tax position and explains how it was calculated. If you’ve used an accountant to complete your return, you’ll get an SA302 (also known as a Tax Calculation) on the back of the return.

Why Would I Need an SA302?

There are a few primary reasons why someone might need an SA302:

  1. Proof of Income: If you’re self-employed or have several sources of income, proving your income can be slightly more complicated than just presenting a payslip. Many lenders or financial institutions will request an SA302 as evidence of earnings.
  2. Mortgage Applications: Mortgage lenders often ask for the SA302 form as it provides a detailed breakdown of income over the tax year. It’s not uncommon for lenders to ask for SA302 forms spanning several years to gauge consistency in earnings. It gives them an idea of how much you earn, helping them decide how much they can lend you.
  3. Renting a Property: Some landlords or letting agents might request an SA302 to ensure potential tenants have a stable income.
  4. Personal Records: It’s always good practice to keep a record of your earnings and taxes paid. The SA302 is a comprehensive document that can be part of your financial records.

What’s on the SA302 Form?

The SA302 form contains:

  • Your total income for the tax year.
  • Breakdown of sources of income (e.g. from employment, property rental, dividends).
  • Total tax owed or refunded.
  • Personal Allowance and other tax adjustments.

It’s worth noting that the SA302 reflects what has been reported to HMRC. So, ensure all your income sources are declared accurately on your Self-assessment tax return.

But There’s a Catch

Here’s where things can get tricky. A tax return can be created without sending it to the tax office (HMRC). So, it’s possible to bump up the profit to make it look like you earn more than you actually do. The idea is to make lenders think you’re a safe bet.

But there’s a system in place to catch this.

Enter: The Tax Year Overview

To make sure everything’s above board, lenders also ask for another document called the Tax Year Overview. This can be obtained online by your accountant or by you if you have an HMRC account.

What’s it for? It shows your tax position with HMRC. Lenders will compare the numbers on this overview with those on the SA302. If they match up, it means the tax return was sent off with the numbers shown on the SA302, and the tax office is okay with it. The lender can then move forward.

What If Things Don’t Add Up?

If the numbers on the SA302 and the Tax Year Overview don’t match, it could cause problems. There might be different reasons for this mismatch, and lenders might stop everything until it’s sorted out. They just want to be sure they have the right information.

How to Get Your SA302 Tax Calculation

You can get evidence of your earnings (your SA302) once you’ve submitted your Self-Assessment tax return. You can also get a tax year overview for any year. To access both, log in to your HMRC online account, go to ‘Self-Assessment’, then ‘More Self-Assessment details’. If you or your accountant use commercial software to do your return, you’ll need to use that software to print your tax calculation. It might be called something different in the software – for example, ‘tax computation’.

If you’ve used an accountant to handle your tax affairs, they can obtain and provide you with the SA302 form.

In Short

The SA302 is basically a snapshot of your tax situation. When teamed up with the Tax Year Overview, it makes sure everything is transparent and above board.

If all this tax talk is making your head spin, don’t hesitate to get in touch for help. It’s always better to be in the know, especially when money is involved.

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A Guide to the New Employment Laws in 2023

The UK’s employment law landscape is constantly evolving, and 2023 so far has been no exception. New laws and regulations regarding employment aiming to protect workers’ rights, promote diversity and offer better working conditions have been passed with some coming into effect in 2023 and others in 2024. So, what are the main changes, and how could they affect you?

Key changes to UK employment laws

Here are five of the notable changes you should be aware of:

  1. Increased flexibility for employees

The pandemic changed how we work, and the government responded by introducing a framework around remote working and requiring employers to discuss and document remote work policies. 

With effect from 1 April 2023, employees now have the right to request flexible working from day one of employment. This removes the existing 26-week qualifying period. Employers will also be required to respond to a flexible working request within 2 months and consult with employees before rejecting it if that’s the decision.

  1. Enhanced protection for pregnant women and new parents. 

The Protection from Redundancy (Pregnancy and Family Leave) Bill 2023 came into force on 24th July 2023, and the regulations needed to bring the proposals into effect are working their way through Parliament. 

Whilst we don’t know yet when the government will make the changes they’ve talked about, the Act will enhance redundancy protection for pregnant workers and working parents returning to the workplace after family-related leave. The Bill will include the right to be offered a suitable alternative vacancy and to be consulted on any redundancy plans.

  1. New rights for carers. 

The Carers’ Leave Act 2024 was passed on 24th May 2023 and gives employees the right to take unpaid time off work to provide or arrange for the care of a dependant with a long-term care need. The Bill introduces a statutory entitlement of five days of unpaid leave per calendar year which will be available to eligible employees from the first day of their employment. The Act is expected to come into force in 2024 and will be a significant step forward for carers who currently have very few legal rights in the workplace.

  1. Increased pay for statutory leave. 

From 2 April 2023, the statutory rate of pay for maternity, paternity, adoption, shared parental and parental bereavement leave increased from £156.66 to £172.48 per week. This is a welcome increase for employees taking statutory leave and helps to ensure they’re not financially worse off when on leave.

  1. Update of statutory redundancy pay calculations.

New limits on employment statutory redundancy pay came into effect on the 6th of April. The result means that employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. 

Informed and in the know

Whilst there are other changes to the UK’s employment laws going through Parliament, these five are important ones to be aware of. It’s in your best interest to know what they mean to make sure you know what you’re entitled to as an employee or what you need to comply with as an employer. 

If you’re unsure how the new employment law changes will affect you or your business, or if you’ve any further questions, it’s a good idea to speak to an employment law specialist. And with some of these changes impacting pay and salaries, we can help give you peace of mind when it comes to payroll.

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How to reduce your Capital Gains Tax

Capital Gains Tax (CGT) is one of those financial terms with the potential to send shivers down anyone’s spine. Often seen as a hindrance, it is a tax levied on the profit gained from selling an asset like property, shares, or valuable possessions. 

While paying tax is a civic duty, there’s no reason you shouldn’t take advantage of legitimate means to reduce your CGT liability. In this blog, we’ll cover some tried and tested strategies to help you minimise your CGT burden.

Understand Your Allowance

Before plunging into complex tax-saving mechanisms, it’s important to understand that the UK has an annual tax-free allowance known as the annual exempt amount (AEA). This is the amount you can make in capital gains without paying any tax. Always take this into account before making any disposals.

For the tax year 2023 to 2024, the AEA is £6,000 for individuals and personal representatives and £3,000 for most trustees. For the tax year 2024 to 2025 and subsequent tax years, the AEA will be permanently fixed at £3,000 for individuals and personal representatives, and £1,500 for most trustees.

How much Capital Gains Tax will I pay?

Again, before looking at ways to minimise your tax payments, it’s good to know how much tax you’ll expect to pay when you sell your assets.

The rates differ if you are looking at gains from residential property and whether you pay a higher rate of Income Tax.

If you pay a higher rate of Income Tax, you’ll pay:-

  1. 28%* on your gains from residential property
  2. 20%* on your gains from other chargeable assets

If you pay basic rate Income Tax, you’ll need to:

  • Work out how much taxable income you have
  • Work out your total taxable gains
  • Deduct your Capital Gains tax-free allowance. 
  • Add this amount to your taxable income.
  • If this amount is within the basic Income Tax band, you’ll pay 10%* on your gains (or 18%* on residential property). You’ll pay 20%* on any amount above the basic tax rate (or 28%* on residential property)

7 Ways to Reduce Capital Gains Tax

  1. Utilise the Spouse Exemption

One of the ways to minimise your Capital Gains Tax is to utilise the spouse exemption. If you’re married or in a civil partnership, you can transfer assets to your spouse or civil partner without triggering CGT. Once the asset is in their name you can utilise both your tax-free allowances, effectively doubling the tax-free amount.

  1. Hold Investments in a Tax-Efficient Wrapper

You might consider holding your investments in an Individual Savings Account (ISA) or a pension fund. Investments within these wrappers can grow and be withdrawn tax-free, offering a legitimate way to avoid CGT. However, bear in mind there are annual limits on contributions to these accounts, so plan wisely.

  1. Offset Your Losses

Another effective way to reduce your CGT is by offsetting capital losses against your capital gains. If you have investments that aren’t performing well, consider selling them to realise a capital loss. These losses can then be used to offset gains, reducing your overall tax liability. You can even carry forward unused losses to offset against future gains.

  1. Make Use of Business Asset Disposal Relief

If you own a business, Business Asset Disposal Relief (formerly Entrepreneurs’ Relief until 2020) could be beneficial. This relief allows you to pay a reduced tax rate of 10% on gains from selling all or part of your business, subject to certain conditions. The lifetime limit for this relief is £1 million, so it’s an excellent way to save on large capital gains.

To qualify for the relief, you must have been a sole trader or business partner for 2 years and owned the business for at least 2 years up to the date you sold your business.

  1. Invest in Enterprise Investment Schemes (EIS)

The EIS is designed to help smaller companies raise finance by offering tax relief to investors. By investing in an EIS-eligible venture, you can defer CGT from other assets as long as the gain is invested in the EIS within a set period. Plus, there are other tax benefits of investing in an EIS, such as income tax relief and inheritance tax exemption.

  1. Make Charitable Contributions

Giving to charity can also help reduce your CGT. If you donate an asset to a registered charity no CGT will be due. Alternatively, you can sell an asset to a charity at less than its market value, which will minimise the capital gain and, therefore, the CGT.

  1. Plan Your Disposals

Timing is everything. Spreading the disposal of assets across multiple tax years can help you maximise your annual tax-free allowance. By planning the timing of your disposals wisely, you can reduce the amount of gain subject to CGT.

Still have questions?

Capital Gains Tax may seem daunting, but there are various strategies to mitigate the amount you pay. By understanding your tax-free allowance, utilising tax-efficient wrappers, and making smart financial decisions, you can minimise your CGT liability and keep more of your hard-earned money. Always remember that failing to plan is planning to fail, especially where taxes are concerned.

If you still have questions about Capital Gains or any other taxes, get in touch or contact us online here

* Remember, these figures can change based on government decisions