Quote from VATcal on 06/04/2024, 15:18

The new tax year brings some significant changes that could affect your finances. Here's a rundown of the key points to be aware of:

Good news for most taxpayers:

• National Insurance (NI) cut: The main rate of employee NI has been further reduced from 10% to 8%. This means you'll keep more of your salary each month.
• Reduced NI for the self-employed: The main rate of Class 4 NICs for the self-employed has been cut from 9% to 6%. Additionally, Class 2 National Insurance payments have been abolished altogether, simplifying the system for the self-employed.
• Increased state pension: The state pension is set to rise, putting more money in the pockets of retirees.

Changes to allowances:

• Dividend allowance: The tax-free allowance for dividends has been cut again, this time to £500. Dividends exceeding this amount may be taxed if your total income goes above the personal allowance.
• Capital gains tax (CGT) allowance: The annual exemption for capital gains tax has been reduced to £3,000. This means you'll pay CGT on a larger portion of any profits you make from selling assets. There's also a new reduced rate of CGT for residential property sales.

Other changes:

• High income child benefit charge (HICBC): The thresholds for the HICBC have been frozen, meaning more high-income families may be affected.

What you can do:

• Review your tax code: Ensure you're using the correct tax code for the new tax year.
• Plan for CGT: If you plan to sell assets, be aware of the reduced CGT allowance and factor this into your calculations.
• Consider tax-efficient investments: ISAs (Individual Savings Accounts) offer tax-free dividends, which can be helpful with the reduced dividend allowance.

Getting help:

• Government resources: The GOV.UK website provides detailed information on the latest tax changes https://www.gov.uk/income-tax-rates.