Under-radar changes announced
Self-assessment. The criteria to be met for an individual to fall within self-assessment have been changed. It had already been announced that the income threshold would increase from £100,000 to £150,000 for 2023/24; meaning that you may have clients earning more than £100,000 taxed under PAYE that can now be removed.
Pro advice. This will apply if the only reason they are in self-assessment is the income level. The other criteria, e.g. self-employment income in excess of £1,000 etc., remain unchanged.
The Autumn Statement announced that from 2024/25, the income threshold will be removed altogether. It is also intended that those who need to pay the high income child benefit charge will be able to do so via PAYE rather than self-assessment, but there are no details regarding when this will be possible as yet.
Cash basis. Currently, accounts for unincorporated businesses must be prepared on the accruals basis by default, with smaller businesses able to elect into a simpler cash basis. The cash basis is restricted in a number of ways, including limited options for loss relief. From April 2024, the turnover restrictions will be abolished altogether, as will the restrictions on loss relief and deductions for interest.
Pro advice. This could simplify reporting for a number of your clients. Explore the possibility of switching to the cash basis with them, and ensure you are familiar with the adjustments necessary to do so (see Follow up ).
Extensions. A number of tax incentives were extended. The enterprise investment scheme and venture capital trust scheme were both extended until 2035. The NI incentive for hiring veterans has been extended by a year until 2025. The incentives available to Freeports and Investment Zones were also extended.
Pro advice. A full overview of all measures is available online (see Follow up ).
Create your profile to unlock this advice and many more.