Accounting News – Spring 2024

The 2024 Spring Budget: What Businesses and Individuals Need to Know

TThe new tax year began on 6 April 2024, and while the headlines may not have shouted “big changes,” there are still some important points that could affect your business or rental property income.

Headline changes

• National Insurance cuts – Employees and the self-employed saw further NI reductions, with the main Class 1 rate cut from 10% to 8% and Class 4 from 9% to 6%. This provides a welcome boost to take-home pay.
• Child benefit reform – The income threshold for the High Income Child Benefit Charge will be raised, helping families previously caught out by “stealth tax.”
• Capital Gains Tax (CGT) – The higher rate of CGT on residential property gains was cut from 28% to 24%, aiming to encourage more property sales.
• VAT threshold rise – The VAT registration threshold increased to £90,000, reducing the compliance burden for smaller businesses.
• Fuel duty freeze – Extended for another year, alongside the 5p duty cut.

Impact on businesses

The VAT threshold increase is particularly significant for small businesses, giving more breathing space before registration becomes mandatory. For medium and large businesses, the key takeaway is still the need to plan for Corporation Tax at 25%.

Impact on individuals

National Insurance cuts and CGT reductions are designed to ease pressure on households, but with Income Tax thresholds still frozen, fiscal drag continues to pull more people into higher bands. Pension planning and tax-efficient savings remain crucial.

👉 What to do next: Review your NI position, check if your business will benefit from the higher VAT threshold, and consider whether selling assets now could reduce CGT.

Frozen Tax Bands Mean Bigger Bills

Income tax thresholds and the personal allowance remain frozen. This means if your income increases — even just slightly — more of it could fall into higher tax bands.

👉 For directors and landlords, this can make corporation tax planning and rental income reporting more important than ever.

National Insurance for Employers

Employers are seeing changes in National Insurance thresholds. For businesses with staff, this means increased payroll costs in 2024/25 and beyond.

👉 Reviewing payroll figures as part of your management accounts helps keep cashflow steady and avoids last-minute surprises.

Corporation Tax Reminder

Corporation tax rates increased in April 2023, with profits over £250k taxed at 25%, while the 19% rate remains for small profits. Businesses in between face a marginal rate.

👉 Monthly or quarterly management accounts can help you forecast where your profits sit, so you can plan ahead rather than scrambling at year-end.

Making Tax Digital is Coming

HMRC is moving closer to full digital reporting for self-employed and landlords. While deadlines have shifted, preparing now by using MTD-compatible software will save stress later.

Want to start this tax year with clarity? Here at A4 Accounting we can help you set up monthly management accounts, keep your bookkeeping up to date, and plan for your year-end tax.