Autumn Budget 2024
On Wednesday 30th October 2024, Chancellor Rachel Reeves announced the governments budget for the upcoming tax year.
The most significant change is to Employers National Insurance. A further article will follow on this.
Here is a summary of updates relevant to limited companies, sole traders, partnerships and landlords.
Limited Companies
Increase to employers’ national insurance rate from 13.8% to 15% from the 2025-2026 tax year.
The employers national insurance payment threshold (secondary threshold) will reduce from £9,100 per year to £5,000 per year. This is below the current lower earnings limit of £6,396 per year (where employees get the benefit of accruing national insurance contributions).
National Insurance Employment Allowance to increase from £5,000 to £10,500 from April 2025. This means that limited companies with at least two directors or one employee on PAYE payroll will not pay the first £10,500 per year of Employers National Insurance.
No Changes to Dividend Tax or Corporation Tax.
Sole Traders / Partnerships
The Personal Tax threshold remains frozen at £12,570 in the 2025-2026 tax year, the threshold is due to increase by inflation in the 2028-2029 tax year.
No Changes to Making Tax Digital for Income Tax (MTD for ITSA) for Sole Traders and Partnerships, which will still apply from April 2026, read more here - https://matrixaccountancyservices.org.uk/news/making-tax-digital-for-self-assessment-mtd-for-itsa-latest-update-for-limited-company-directors-sole-traders-partnerships-and-landlords
Landlords
Capital Gains Tax (CGT) on residential properties to remain at 18% and 24% respectively in the 2025-2026 tax year.
Increase in Stamp Duty surcharge on second properties from 3% to 5% with immediate effect.
The Personal Tax threshold remains frozen at £12,570 in the 2025-2026 tax year, the threshold is due to increase by inflation in the 2028-2029 tax year.
No Changes to Making Tax Digital for Income Tax (MTD for ITSA) for Landlords, which will still apply from April 2026, read more here - https://matrixaccountancyservices.org.uk/news/making-tax-digital-for-self-assessment-mtd-for-itsa-latest-update-for-limited-company-directors-sole-traders-partnerships-and-landlords
Other Updates
Capital Gains Tax (CGT) will rise from 10% to 18% at the lower rate, and from 20% to 24% at the higher rate in the 2025-2026 tax year, the rates on residential properties remain unchanged.
The VAT registration threshold to remain unchanged in 2025-2026 at £90,000 per year.
Minimum Wage to increase to £12.21 per hour for over 21s, from April 2025.
Fuel duty to remain unchanged in 2025-2026.
The tax benefits for company electric vehicles to remain unchanged in 2025-2026.
VAT to be introduced on private schools from January 2025.