Tax and contracting News
27 - 11 - 2023
On 22 November
2023 the Chancellor of the Exchequer, Jeremy Hunt, presented his Autumn
Statement to the Houses of Parliament. The Statement is an opportunity for the
Government to announce any proposed tax changes and give an updated economic
forecast.
A summary of
the main tax announcements is noted below. Please do not hesitate to contact Foremans LLP if you have any questions regarding items not addressed:
1. Personal
Taxation
Ø Income
Tax Rates and Thresholds
·
No proposed changes to income
tax rates and thresholds.
|
|
|
2023/2024 |
2024/2025 |
|
Personal
Allowance |
|
£12,570 |
£12,570 |
|
Tax
Thresholds |
|
Tax
Percentages |
|
|
Basi
tax rate |
£12,570
to £50,270 |
20% |
20% |
|
Higher
tax rate |
£50,271
to £125,140 |
40% |
40% |
|
Additional
tax rate |
Above
£125,140 |
45% |
45% |
Ø National
Minimum and Living Wage
01 April 2024
National Minimum and Living Wage will increase to £11.44 an hour for workers
aged 21 plus.
Ø National
Insurance Contribution Rates
Ø Employees:
–
Class 1 Employee NIC will reduce from 12% to 10% on 06 January 2024.
- No change to the thresholds.
Ø Self
Employed:
– Class 4 NIC will reduce from 9% to 8% from 06
April 2024.
- Class 2 NIC will be abolished from 06 April
2024.
Ø Individuals
taxed only through Pay As You Earn (PAYE) will not be required to file a Self
Assessment Tax Return from 2024/2025 Tax Year.
Ø Making
Tax Digital (MTD) will be implemented for Self Employed and Landlords with
annual income over:
o
£50,000 from April 2026.
o
£30,000 from April 2027.
Ø The
income tax basis for the Self Employed and Partnerships will be simplified from
06 April 2024. Detail to be released.
2. Business
Tax
Ø No
changes to Corporation Tax
Ø The
capital allowances full expensing regime has been made permanent. Main Rate
assets can claim a 100% first year allowance and special rate assets a 50%
first year allowance.
Ø Investment
zones in England are extended from a 5 year life to a 10 year life. 3 new zones
announced in England - Greater Manchester, West Midlands and East Midlands. One
new investment zone in Wales – Wrexham.
Ø Business
Rates – 75% business rates relief for Retail, hospitality and Leisure industry
extended for one more year.
Ø IR35
Offset Facility
As
of 06 April 2024 where a failure to deduct PAYE and NI is assessed HMRC will be
able to set off the deemed employer PAYE liability against taxes paid by a
worker and their intermediary.
Ø Construction
Industry Scheme (CIS)
-
VAT tests will be added to the
Gross Payment Status Process.
-
Removal of majority of landlord
to tenant payments from the scope of CIS.
-
The first review of a gross
payment status holder’s compliance history will be brought forward to 6 months
after application for gross status. The review will revert to 12 months after.
3. Other
Taxes
Ø Alcohol
– Alcohol duties frozen until 01 August 2024.
Ø Tobacco
– Increase in duty on all tobacco products by
RPI + 2%.
– Increase in duty on hand rolling tobacco by
RPI + 12%.
Ø HGV
Levy and Vehicle Excise Duty – will be frozen at 2023/2024 rates for 2024/2025.
Ø Vehicle
Excise Duty for cars, vans and motorcycles – increase by RPI from 01 April
2024.
4. Other
Measures
Ø Benefits
-
Universal credit and other working age benefits in England and Wales will be
increased by 6.7% from 06 April 2024.
-
people claiming benefits will need to do mandatory work experience if they do
not find employment within 18 months.
-
Work Capability Assessment to be reformed to reflect availability of home
working.
Ø State
Pension – will be increased by 8.5% from 06 April 2024.
Ø A
retail share offer for the sale of some of the UK Government’s stake in Natwest
Bank.
5. Tax
Compliance
Ø HMRC’s
debt management resource is to be increased to support individuals and
businesses who are unable to pay their tax.
The
above is meant as an indication of the main points included in the Autumn
Statement 2023. The information should not be relied upon as taxation advice.
Please
contact us at Foremans LLP on 01244 625 500 for a free no obligation discussion
on any of the changes above.
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WEEKLY INCOME INFORMATION
Income For A Week
Pre Tax Income
Choose the Industry Sector that you work in. Use the drop down menu in the usual way.
The VAT Flat Rate Applied -
-
RESULTS TABLES
COMPARISON TABLE FOR NET INCOME
RELATIVE INCOME BY STRUCTURE
Weekly by :-
Annually by :-
Weekly by :-
Annually by :-
Fixed Data
PAYE
Statutory rates
CIS
Corporation tax
National insurance
UMBRELLA COMPANY
AGENCY INFORMATION
Assumptions
General
- The user is over 21 and subject to tax in the UK
- The user wishes to minimise their tax liability
- The user is subject to national insurance i.e.he/she is not over retirement age
- Only current tax rates and limits are applied
- No tax mitigation payments are made e.g. pension contributions
- Only 3 digit letter 'L' tax codes shown in the drop down list can be entered
- The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply
Expenses
- All miles claimed as expenses are for business use using a personally owned car or van
- All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business
Foremans LLP Charges
- Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
- Foremans current Service Costs are allowed for in all calculations.
Holiday Pay
- Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year
VAT
- Limited Company or Sole Trader will be VAT registered
- Limited Company or Sole Trader will take advantage of Flat rate VAT
- Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration
Limited Company Conditions
- One director / one shareholder in a Personal Service Company
- Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
- Director's salary is maximum salary to the primary threshold for NI
- The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company
NOTES
- The Current tax rates are taken from the Fixed Data Table
- The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
- The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
- Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
- Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
- Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
- The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage
Dave Wilde, Foremans (UK) Limited
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