Under-radar changes to be aware of

January 9th 2024

The National Insurance cuts in the 2023 Autumn Statement grabbed the headlines, but there were a number of other changes also announced. What were the most important to be aware of?  Naomi Swan outlines the changes in this article.

The criteria to be met for an individual to fall within self-assessment have been changed. It had already been announced that the income threshold would increase from £100,000 to £150,000 for 2023/24; meaning that those earning between £100,000 and £150,000 taxed under PAYE that can now be removed.

This will apply if the only reason they are in self-assessment is the income level. The other criteria, e.g. self-employment income in excess of £1,000 etc., remain unchanged.

The Autumn Statement announced that from 2024/25, the income threshold will be removed altogether. It is also intended that those who need to pay the high-income child benefit charge will be able to do so via PAYE rather than self-assessment, but there are no details regarding when this will be possible as yet.

Cash basis
Currently, accounts for unincorporated businesses must be prepared on the accruals basis by default, with smaller businesses able to elect into a simpler cash basis. The cash basis is restricted in a number of ways, including limited options for loss relief. From April 2024, the turnover restrictions will be abolished altogether, as will the restrictions on loss relief and deductions for interest.
This could simplify reporting. Explore the possibility of switching to the cash basis and ensure you are familiar with the adjustments necessary to do so.

A number of tax incentives were extended. The enterprise investment scheme and venture capital trust scheme were both extended until 2035. The NI incentive for hiring veterans has been extended by a year until 2025. The incentives available to Freeports and Investment Zones were also extended.

The income threshold for self-assessment is to be removed for 2024/25. Check to see if you no longer need to submit tax returns. The cash basis is also being expanded, meaning you may be able to simplify the reporting.

For further clarification on the recent changes as announced in the Autumn Statement, contact the JRW Hogg & Thorburn team directly.

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