Changes to the Self-Assessment Threshold and Filing Requirements

From April 6, 2023, the self-assessment (SA) threshold for individuals with PAYE income only has increased from £100,000 to £150,000. This means many taxpayers will no longer need to submit a Self-Assessment return. However, there are specific cases where filing will still be required, including:

• Receiving child benefit with adjusted net income over £50,000 (rising to £60,000 from April 2024)
  
• Earning over £1,000 from self-employment
  
• Partnership income
  
• Receiving untaxed income, such as dividends, above the annual allowance

Even if you’re no longer required to file, it may still be beneficial to continue filing voluntary Self-Assessment returns. We can help assess your eligibility and offer advice on whether to continue filing or opt-out.

Changes to Dividend and Capital Gains Tax Allowances

The UK has significantly reduced annual allowances:

• The dividend allowance has been cut from £2,000 to £1,000 for the 2023/24 tax year, and will further decrease to £500 from April 2024.
  
• The capital gains tax (CGT) exemption has been reduced from £12,300 in 2022/23 to £6,000 in 2023/24, with another reduction to £3,000 scheduled for 2024/25.

These reductions mean that more individuals may need to file Self-Assessment returns due to increased dividend income and capital gains. To avoid unexpected tax bills, it’s important to review clients’ dividend income and capital gains and consider tax planning strategies. We can help ensure you are fully compliant and take steps to minimise your liabilities.

The Impact of Changes to Furnished Holiday Lets (FHL) Tax Regime

The UK government has announced the withdrawal of the Furnished Holiday Lets (FHL) tax regime from April 6, 2025. This means that owners of FHL properties will lose certain tax advantages, such as favourable treatment for income tax, capital gains tax, and capital allowances.

Anti-forestalling provisions, effective from March 6, 2024, will prevent tax avoidance via FHL property disposals to connected parties. If you are involved in FHL property ownership, it’s crucial to review your tax position before the scheme ends and seek professional advice to navigate the upcoming changes effectively.

Self-Employed Tax Calculation Changes from 2024/25

Starting with the 2024/25 tax year, the default method for calculating taxable profit for self-employed taxpayers will shift from accruals to cash basis. This change will occur automatically unless taxpayers opt to retain the accruals method.

For many businesses, the cash basis can offer tax-planning opportunities. However, it may not suit every business model. We can help you assess whether this change benefits your business and assist with your tax planning strategy.

Let us help you !

As the tax landscape evolves, it’s more important than ever to ensure your business is prepared. The new tax rules offer both opportunities and challenges. At BM and Co Accountants, we specialise in providing tailored advice for sole traders, partnerships, and the self-employed. Contact us today to ensure your business is fully compliant and making the most of tax-saving opportunities. Contact us now for a consultation and let us help you navigate these changes with ease.