New tax year, new allowances!


10th April 2024

The 6th April 2024 marks the start of a new financial year. In this article we review the new annual allowances, exemptions and details of self assessments that may be applicable to you. It is also a timely reminder to do some housekeeping to ensure you are remaining tax compliant and are paying the correct amount of tax.

New tax year, new allowances!

The tax-free Personal Allowances come into effect on the 6 April each year, the personal allowance is £12,570 for the 2024/25 tax year which has remained static since April 2021.

You will also be entitled to a capital gains tax annual exemption of £3,000 (£1,500 for trustees) for 2024/25 which has decreased from £6,000 (£3,000 for trustees) in the previous tax year.

Every tax year you can put money into a Cash or Stocks and Shares ISA. You can save up to £20,000 in one type of account or split the allowance across the other types. You can only pay £4,000 into your Lifetime ISA in a tax year.

The pension annual allowance is also refreshed on the 6 April and the 2024/25 allowance remains at £60,000. Don’t forget that any unused pension allowances from the previous three tax years can also be utilised to avoid incurring a tax charge.

The dividend allowance is being halved to £500 from 6 April 2024.

This might also be the time to consider utilising some of the many inheritance tax annual exemptions that are available to all individuals.

Starting the New Year as you want to go on

The 6th April 2024 marks the start of a new financial year when the new annual allowances and exemptions noted above come into effect.

It is also a good time for housekeeping to ensure you are remaining tax compliant and are paying the correct amount of tax.

You may receive letter to confirm your tax code for the year. The numbers within your tax code refer to the amount of tax-free income you’re entitled to that year. This can change annually due to any taxable benefits you may receive or previous underpayments of tax. It essential that you check they’re correct upon receiving them to ensure you are paying the right amount of tax.

This is also the best time to sort through your paperwork for your next Self-Assessment tax return. Although your return is not due until January 2025, having the documentation and supporting evidence ready will allow you or your tax advisor to prepare and submit your tax return early. This, in turn will avoid any last-minute pressure and will give you early notification of the tax due by 31 January 2025

Payment on account due 31 July 2024

July is when many individuals make their second payment on account.

Payments on account are advance payments towards your next tax bill. They’re calculated based on your tax bill from the previous year. This is done to space out the payments for individuals and trustees who would otherwise have to pay one larger sum in January.

You can make this payment via postal cheque, the HMRC online portal or by BACS from your online banking.

Deadline to register for Self-assessment 5 October

The 5th October marks the date you need to register for Self-Assessment. There are three ways to do this depending on whether you are:

  • Self-employed
  • Not self-employed
  • Trustee of a taxable trust

If you’re now self-employed and you’ve never submitted a Self-Assessment before, you’ll first need to register. Upon receiving your registration, HMRC will send you a letter with your 10-digit Unique Taxpayer Reference number on, which will allow you to set up your account for the Self-Assessment online service.

Once you’ve filed, HMRC will be able to determine your Income Tax rate and National Insurance due.

For those who are not self-employed and have earnings outside of PAYE, the form you need to complete is your SA1 form, which identifies that you have income that needs to be taxed. This extends to any of the following sources of income:

  • Income from employment
  • Income from pensions
  • Interests from savings
  • Rental income
  • Employment benefits
  • Income from a trust

For those who are a trustee of a trust that needs to pay tax for the first time, you will need to log into your government gateway for HMRC’s Trust Register using your ID and password and confirm that the trust is taxable for the 2023/24 year. HMRC will send you a letter with the trusts 10-digit Unique Taxpayer Reference number on.

Non taxable trusts that were in existence on or after the October 2020 should have been registered with HMRC’s Trust Register by the 1 September 2022 or within 90 days of being created (whichever is later).

Paper Self Assessment deadline 31 October 2024

Many taxpayers still file their Self-Assessment tax returns via paper through the post.

The deadline for this method, however, is three months earlier than online. Luckily, this means that, should you miss the deadline to submit via paper, you have a second chance to file digitally.

A point to note, is that it is HMRC’s intention is to gradually phase out paper submissions and therefore for some it’s better to get to grips with the online submission sooner rather than later.

Online Self Assessment deadline and tax due 31 January 2025

Lastly the 31 January deadline marks the point when the majority of UK taxpayers submit their Self-Assessment tax return online.

Filing this late in the year can put both you and your accountant under pressure to meet the deadline and can result in you incurring late penalties and interest if missed due to unforeseen circumstances. While filing soon after the end of the tax year may feel unnecessary, it allows you to plan ahead for your tax bill and avoid any last-minute rush.

Annual TRS Declaration for taxable trusts

If you are a trustee of a taxable trust you must declare the trust is up to date on an annual basis by 31 January following the end of each tax year in which a tax liability arises.

When making this declaration, trustees must ensure that all changes to the additional information required from taxable trusts that took place within that tax year have been recorded on Trust Register. Information on the assets of the trust recorded at the point of registration does not need to be kept updated with this annual update.

The remainder of the information on TRS must be kept updated within 90 days of the date that the trustees become aware of changes to the trust details or beneficial ownership.

If you need advice on succession and tax issues

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