The time has arrived for us to update you on the ins and outs of this year’s Autumn Budget. And oh boy is it interesting! 🍁
Taking place after Brexit and COVID-19 and amidst inflation and the cost of living crisis, the tax tea was certainly spilled! ☕ But then again, when is the Autumn Statement ever boring?
We’ve got lots to cover, and you’ll want to read every last bit, so let’s get stuck in 🏁
The Autumn Budget is a yearly statement by the UK’s Chancellor of the Exchequer revealing the UK Government’s plans for raising and spending money for the new tax year.
In the run-up to the Autumn Statement, it’s always highly anticipated that there will be some tax changes, for better or worse (we hope better)🤞
So, what was revealed this year? 📣
Let’s start with the good news.
The National Living Wage (NLW) will rise from April 2024 to £11.44 per hour for those aged 21 and over (down from 23 previously).
The NLW currently sits at £10.42 per hour and with the cost of living crisis still looming over our heads, this news will be well received by the public.
In 2024, both self-employed and employed people will be paying less National Insurance!
For self-employed people, Hunt announced that the Class 2 National Insurance payments will be scrapped completely. Currently, it’s a payment of £3.45 a week. This means that self-employed people will be saving £179 a year. The Class 4 National Insurance main rate is also being reduced from 9% to 8% for those earning over £12,570 a year. Both these changes will take place from April 2024.
For employed people earning between £12,570 and £50,270, basic rate tax payers, NI is being cut from 12% to 10%. This change comes in from 6 January 2024, allowing people to keep more of what they earn before the start of the new tax year, according to Hunt.
An ISA is a type of savings account that allows you to put away up to £20,000 of savings each year without paying any tax.
There are various types of ISAs available to UK residents. But, it can get confusing, as each has its own purpose and rules.
You can find more information on the different types of ISA here
Hunt promised an easier way for people to manage their personal finances. Specifically, their ISAs. It seems that some changes will be made from April of next year. These include:
The reason for this? Well, whilst friends and relatives might encourage you to save for your future, the government is thinking a little more strategically. They hope that the new ISA regulations will boost investment in companies listed on the London Stock Exchange 🏙️ A win-win, perhaps?
The pension triple lock ensures that the State Pension retains its value, especially with the rising cost of living 🏃
The State Pension is supposed to increase every year in line with whichever is the highest out of the following:
It was introduced in 2010 and the Conservative Party confirmed in 2019 that it would be kept in place📍
The rumour that the pension triple-lock is about to be unlocked didn’t turn out as expected. Hunt confirms that the triple lock will continue to be “honoured” with an 8.5% rise in the State Pension for 2024/25. Score!
HMRC recently changed their stance on the high earner tax return threshold and who needs to file a Self Assessment tax return. Right now, you only need to file a tax return as a high earner if:
This has now been changed. From the 2024/2025 tax year, if all the income you earn is paid through PAYE, no matter what you earn, you’ll no longer need to file a Self Assessment tax return.
Although you no longer need to file, you might still need to let HMRC know that you don’t plan on doing so. HMRC love a good waiting game, so you’ll have to wait and see what they say about how to proceed. Don’t hold your breath for news any time soon!
Remember, if you earn any self-employment or rental income alongside your PAYE income or if you have any other reason to file, you’re not exempt and will need to proceed as normal.
Of course, there were many, many other changes the government made. Here are some other confirmed changes from the Autumn Statement:
And lots more. There was no mention of the Inheritance Tax rate reduction that was cruising the tax gossip circles. For more, you can read the in-depth details from HMRC’s statement about all the changes. Warning, there’s a lot of jargon.
Wow. We got there in the end 😅
Maybe a little less doom than expected, however we are yet to see the effects of these changes. We’ll keep you updated as always 😉
And, if you need a helping hand filing your tax return correctly this year, you’re in exactly the right place.
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