How much income can you receive before paying tax?
- 2024/25 tax year – £12,570 p.a.
- you start to lose this allowance when annual income exceeds £100,000
How much income can you receive before paying higher rate tax (40%)?
- 2024/25 tax year – £50,270 p.a.
How much income can you receive before paying additional rate tax (45%)?
- 2024/25 tax year – £125,140 p.a.
How much dividend income can you receive before paying tax?
- 2024/25 tax year – £500 p.a.
Tax on Dividends
- Basic rate taxpayers pay 8.75%
- Higher rate taxpayers pay 33.75%
- Additional rate taxpayers pay 39.35%
How much interest can you receive before paying tax?
- Basic rate taxpayers – £1,000 p.a.
- Higher rate taxpayers – £500 p.a.
- Additional rate taxpayers – £0 p.a.
National Insurance Contributions (NICS)
- From April 2024 Class 1 Employee NICS will be reduced to 8%
- From April 2024 Class 2 Self Employed NICS will be abolished
- From April 2024 Class 4 Self Employed NICS will be reduced to 6%
Capital Gains Tax (CGT)
- The Annual tax exempt Amount of CGT for individuals is £3,000 for the 2024/25 tax year
- Basic rate taxpayers pay 10% (18% on property sale)
- Higher rate taxpayers pay 20% (24% on property sale)
Inheritance Tax (IHT)
- The Inheritance Tax nil-rate band will remain at £325,000 per person until April 2028
- The residence nil-rate band will remain at £175,000 until April 2028
- The residence nil-rate band taper will continue to start at £2 million
ISA contribution limits
- The 2024/25 annual ISA limit is £20,000
- The 2024/25 Junior ISA annual limit is £9,000
A number of changes have been announced for ISAs from April 2024
- It will be possible to make multiple subscriptions to ISAs of the same type in a single tax year
- Partial transfers between providers will be permitted in a single tax year
- Long-term asset funds and open-ended property funds with extended notice periods will be permitted in the Innovative Finance ISA
- Government is also consulting on an additional £5,000 annual ISA allowance – the UK ISA. Investments into this allowance will be UK companies only
Pensions
- Lifetime Allowance is being scrapped, but maximum Pension Commencement Lump Sum (“Tax Free Cash”) is frozen at £268,275.
- Annual Allowance for gross pension contributions is £60,000.
- roughly… Once total income exceeds £260,000 p.a. the annual gross pension input allowance starts to reduce. If total income is £360,000 or more, the annual gross pension input allowance is limited to £10,000. (Carry Forward may be an option.)
- The Money Purchase Annual Allowance for those who have flexibly accessed their pensions is £10,000. You can contribute £10,000 (gross) in a tax year, even if you have previously “flexibly” accessed a pension. You still need to earn at least £10,000 for this to work.
Child Benefit
- High Income Child Benefit Charge (HICBC) reform – The government will increase the HICBC threshold to £60,000 from April 2024. The rate at which HICBC is charged will also be halved so that Child Benefit is not fully withdrawn until individuals earn £80,000 or higher. Government plans to administer the HICBC on a household rather than an individual basis by April 2026.
VAT Registration
Registration threshold increased to £90,000 and the deregistration threshold reduced to £88,000 from 1 April 2024
This post is intended as information only and does not constitute advice in any way. The information contained herein could be wrong or may have changed by the time you read it so should not be relied upon in any way.