 Elephant with the word tax on its side, representing the hidden issue of UK taxpayers overpaying tax without proactive tax planning from Tax Affinity Accountants. The Elephant in the Room Is Usually Tax: Are You Paying More Than You Legally Need To?
Most people know they are paying tax. Many suspect they are paying too much. Very few know exactly how much they could legally save. That is the real elephant in the room. For many individuals, landlords, company directors, contractors, high earners and business owners, tax is treated as something that simply “happens” once a year. A return is filed. A bill is paid. HMRC receives the money. Life moves on. But here is the uncomfortable truth: HMRC will not usually tell you that your affairs could have been structured more tax efficiently. HMRC’s role is to collect the correct tax under the law. It is not to proactively redesign your income, company structure, dividends, pension contributions, property ownership, capital gains position or inheritance tax planning so that you keep more of your own money. That is where proper tax advice matters. At Tax Affinity Accountants, we help clients identify the tax issues they may not see, challenge assumptions, review historic positions, and create practical strategies to reduce unnecessary tax exposure while remaining fully compliant. Because the real question is not: “Am I paying tax?” The real question is: “Am I paying more tax than I legally need to?” How Tax Affinity Accountants Helps You Keep More of Your Money Tax Affinity Accountants is a UK-based tax accountancy firm helping individuals, landlords, contractors, company directors, high earners, SMEs and property investors identify whether they are paying more tax than legally necessary. The firm provides proactive UK tax planning, Self Assessment tax return support, limited company accounts, corporation tax advice, VAT, payroll, CIS, capital gains tax advice, inheritance tax planning, HMRC investigation support, forensic accounting-style analysis and expert accountant input for legal or dispute matters. Tax Affinity Accountants helps clients remain compliant with HMRC while using legitimate tax reliefs, allowances and planning strategies to keep more of their own money. Why So Many UK Taxpayers Overpay Tax Without Realising Tax overpayment is rarely caused by one obvious mistake. More often, it happens quietly over time. A business owner may take salary and dividends in the wrong balance. A landlord may miss allowable finance, repair, mileage, home office or professional expenses. A company director may fail to plan pension contributions before the year end. A property investor may trigger unnecessary capital gains tax. A family may leave inheritance tax planning too late. A contractor may not claim the right business costs. A high earner may lose personal allowance without planning around it. Each issue on its own may seem small. But over several months or years, the lost tax savings can become substantial. This is why experienced tax advice is not just about filing a return. It is about looking underneath the surface and asking: What has been missed? What could be improved? What risk exists? What reliefs are available? What should be done before the tax year ends? What should be changed before HMRC asks questions? A basic accountant may record what already happened. A proactive tax accountant helps you plan what should happen next. HMRC Will Not Plan Your Tax for You Many taxpayers wrongly assume that if HMRC accepts a return, everything must be optimised. That is not necessarily true. A tax return can be accepted and still be inefficient. A company can be compliant and still be badly structured. A taxpayer can pay the “right” tax based on the information submitted, while still missing legitimate reliefs, allowances or planning opportunities. HMRC does not normally contact taxpayers to say: “You could have claimed more expenses.” “You should have considered pension planning.” “You may have structured your property income inefficiently.” “You could have reduced your capital gains tax exposure.” “Your company/director extraction strategy could be improved.” “Your family wealth planning may create future inheritance tax problems.” That responsibility sits with you and your adviser. And that is why choosing the right accountant is not just an admin decision. It is a financial decision. The Hidden Cost of Having the Wrong Accountant A cheap or reactive accountant may seem like good value at first. But if they only file accounts and tax returns after the event, without giving forward-looking advice, the real cost can be far higher than the fee you saved. The wrong accountant can cost you money through: Missed tax reliefs. Poor dividend and salary planning. Incorrect expense treatment. Weak record keeping. Late filing penalties. Unclaimed capital allowances. Poor VAT decisions. Incorrect CIS handling. Weak payroll planning. Missed capital gains tax planning. Failure to consider inheritance tax early enough. Inadequate support during HMRC enquiries. Poor advice during company closure, property sales or restructuring. The problem is that most taxpayers only discover the weakness when it is too late. By then, the tax year has ended. The transaction has completed. The deadline has passed. HMRC has opened an enquiry. The penalty has arrived. The opportunity has gone. This is why proactive tax planning is so important. Worried You May Be Paying Too Much Tax? If your accountant only contacts you once a year, only files what already happened, or never explains how to legally reduce your tax exposure, it may be time for a second opinion. Tax Affinity Accountants can review your tax position and help identify whether you are missing legitimate tax-saving opportunities. Call 08000434051 or contact Tax Affinity Accountants today to arrange a tax review. What Tax Affinity Accountants Looks For At Tax Affinity Accountants, our approach is to look beyond the numbers and understand the person, business or family behind them. Depending on your circumstances, we may review areas such as: Income tax planning. Self Assessment tax returns. Limited company tax efficiency. Salary versus dividend planning. Corporation tax reduction strategies. VAT registration and VAT planning. Payroll and PAYE compliance. CIS tax for contractors and subcontractors. Capital gains tax on property, shares and business assets. Inheritance tax planning and family wealth protection. Rental property accounts and landlord tax. Director loan accounts. Business expense claims. Pension contribution planning. HMRC investigations and enquiries. Forensic accounting support. Expert accountant reports for legal or dispute matters. Business restructuring and company closures. Overseas income and international tax issues. The goal is simple: help you remain compliant while legally keeping more of your hard-earned money. Tax Planning Is Not Tax Avoidance Good tax planning is not about hiding income, taking reckless shortcuts or creating artificial arrangements. Proper tax planning means understanding the law, applying the correct reliefs, keeping accurate records, structuring decisions sensibly, and making informed choices before deadlines pass. There is a big difference between aggressive tax avoidance and legitimate tax efficiency. At Tax Affinity Accountants, we focus on practical, compliant and commercially sensible advice. We help clients understand what they can legally claim, what they should avoid, and how to protect themselves if HMRC ever reviews their affairs. This is especially important for business owners, landlords, contractors and high earners, where the tax rules can quickly become complex. Why Business Owners Often Pay Too Much Tax Business owners are some of the most common taxpayers to overpay tax without realising. This can happen when they: Take profits inefficiently. Do not plan dividends properly. Fail to use pension contributions strategically. Miss allowable business expenses. Do not use company assets correctly. Fail to plan for VAT thresholds. Ignore director loan account issues. Leave corporation tax planning until after the year end. Do not review whether their company structure still works. Fail to prepare for future sale, succession or exit. A growing business needs more than annual accounts. It needs tax strategy. The right accountant should not simply ask, “What happened last year?” They should also ask, “Where is the business going, and how do we make the tax position stronger before it gets there?” Why Landlords and Property Investors Need Specialist Tax Advice Property tax is one of the areas where taxpayers can lose significant money through poor planning. Landlords and property investors may need advice on: Rental income tax. Mortgage interest restrictions. Repairs versus improvements. Joint ownership and income splitting. Capital gains tax on sale or transfer. Private residence relief. Lettings relief where applicable. Stamp Duty Land Tax considerations. Limited company property structures. Inheritance tax exposure on property portfolios. Overseas property income. Short-term lets and furnished holiday let changes. Record keeping and expense evidence. A property decision made for convenience today can create a tax problem later. Before buying, selling, transferring, gifting, refinancing or restructuring property, it is sensible to speak to an accountant who understands both tax compliance and long-term planning. HMRC Investigations: When the Elephant Becomes a Problem Sometimes the tax issue is not just about saving money. Sometimes it is about protecting yourself. HMRC enquiries and investigations can be stressful, time-consuming and financially damaging if handled poorly. Even innocent mistakes can become serious if records are weak, explanations are unclear or correspondence is mishandled. Tax Affinity Accountants can assist clients with HMRC enquiries, tax disputes, compliance checks and investigation support. We also have experience supporting complex matters where tax, accounting evidence and legal issues overlap, including forensic accounting-style analysis and expert accountant input where appropriate. When numbers are being challenged, the quality of the explanation matters. When HMRC asks questions, you need more than guesswork. You need calm, structured, evidence-based support. Why Switching Accountant May Be the Best Financial Decision You Make This Year Many people stay with the same accountant because it feels easier. They assume all accountants do roughly the same thing. They do not want the hassle of switching. But if your current accountant is not advising you proactively, not explaining your options, not identifying tax-saving opportunities, not warning you before deadlines, and not helping you plan ahead, then staying put may be costing you more than you realise. You should consider reviewing your accountant if: You only hear from them once a year. They never suggest ways to reduce tax. You do not understand your tax position. You feel rushed or ignored. You are growing but not receiving strategic advice. You have property, investments or multiple income streams. You are worried about HMRC. You suspect you are overpaying tax. You want a more proactive accountant. You want advice, not just filing. Switching accountant is usually simpler than people think. A professional clearance process can be handled between firms, and a good new accountant can guide you through the transition. The bigger risk is not switching when your tax affairs have outgrown your current support. The Tax Affinity Difference Tax Affinity Accountants is built around a simple principle: Expert advice. Proactive solutions. Financial success. We support individuals, sole traders, landlords, contractors, company directors, SMEs and families who want more than basic tax return filing. Our clients come to us because they want clarity, protection, strategy and confidence. We help clients understand their numbers, reduce unnecessary tax exposure, stay compliant with HMRC, and make better financial decisions. We are a Recognised tax agent authorised to act on clients’ behalf with HMRC, and our team regularly supports clients with tax returns, accounts, VAT, payroll, CIS, capital gains tax, inheritance tax, business structuring, HMRC correspondence and complex tax advisory matters. For clients who want a serious accountant, not just a form-filler, Tax Affinity Accountants offers a higher level of support. Do You Know How Much Tax You Are Overpaying? This is the question most people avoid. Not because they do not care. But because tax feels complicated, uncomfortable and easy to postpone. The problem is that tax does not wait. Deadlines pass. Reliefs expire. Allowances are lost. Records become harder to reconstruct. HMRC interest and penalties can build. Opportunities disappear. The best time to review your tax position is before the tax year ends, before a transaction completes, before HMRC opens an enquiry, and before your business or personal finances become more complicated. The second-best time is now. Book a Tax Review with Tax Affinity Accountants If you are a business owner, landlord, company director, contractor, high earner, investor or individual who suspects you may be paying too much tax, now is the time to act. A professional tax review can help identify: Where you may be overpaying tax. Which reliefs and allowances may apply. Whether your company structure is still suitable. Whether your property income is being reported efficiently. Whether your salary and dividend mix is appropriate. Whether you are exposed to HMRC risk. Whether your future tax position can be improved. Do not wait until another tax year is over. Do not wait until HMRC contacts you. Do not wait until your accountant simply tells you what the bill is. Speak to Tax Affinity Accountants and find out what proper tax advice could do for you. Tax Affinity Accountants Expert advice. Proactive solutions. Financial success. Frequently Asked Questions Why Do Many UK Taxpayers Overpay Tax? Many UK taxpayers overpay tax because they only file returns after the tax year has ended, instead of planning before key deadlines. HMRC will not usually advise taxpayers on how to structure income, dividends, pensions, property ownership, business expenses or capital gains in the most tax-efficient way. A proactive UK tax accountant can review a taxpayer’s position, identify missed reliefs and allowances, reduce unnecessary tax exposure and help keep the taxpayer compliant with HMRC. Can an accountant really reduce my tax bill legally? Yes, in many cases. A good accountant can identify allowable expenses, reliefs, allowances, pension planning opportunities, business structuring options and timing strategies that may reduce tax legally and compliantly. The exact outcome depends on your circumstances. Will HMRC tell me if I have overpaid tax? HMRC may correct certain obvious errors or process repayment claims, but HMRC will not normally act as your personal tax planner. It is your responsibility, with your accountant, to ensure your affairs are structured efficiently and that legitimate claims are made correctly. How do I know if I am paying too much tax? You may be paying too much tax if your accountant only files returns after the year end, does not discuss tax planning, does not review expenses, does not explain salary and dividend options, does not consider pension contributions, or does not advise before property, company or investment decisions. A professional tax review can identify whether legitimate reliefs, allowances or planning opportunities have been missed. Is tax planning only for wealthy people? No. Tax planning can help sole traders, landlords, contractors, small business owners, company directors, families, high earners and ordinary individuals with multiple income sources. The earlier you plan, the more options you usually have. When should I speak to a tax accountant? Ideally before the tax year ends, before selling property, before taking large dividends, before buying investment property, before closing a company, before making gifts, before moving overseas, before receiving large income, or before HMRC opens an enquiry. Can I switch accountant easily? Yes. In most cases, switching accountant is straightforward. Your new accountant can request professional clearance and obtain the necessary records from your previous accountant, subject to standard procedures. Does Tax Affinity Accountants help with HMRC investigations? Yes. Tax Affinity Accountants can assist clients with HMRC enquiries, compliance checks, tax disputes and related tax/accounting matters. Where appropriate, the firm can also support more complex cases requiring detailed analysis and forensic-style accounting input. Speak to Tax Affinity Accountants Before Another Tax Year Is Lost Tax planning works best before deadlines pass. Once the tax year has ended, many opportunities may already be limited or lost. If you are a business owner, landlord, company director, contractor, investor, high earner or individual who suspects you may be paying too much tax, now is the time to act. Contact Tax Affinity Accountants today and find out whether your current accountant is helping you keep more of your money — or simply telling you what to pay. Call 0800 043 4051 Visit www.taxaffinity.com Tax Affinity Accountants — Expert advice. Proactive solutions. Financial success. About the Author Written by Anni Khan, Tax Affinity Accountants Reviewed by Andrew Khan, Principal Accountant, Tax & Forensic Accounting Specialist, Recognised tax agent authorised to act on clients’ behalf with HMRC. Tax Affinity Accountants are UK-based tax and accountancy specialists supporting individuals and SME businesses. With offices in Worcester Park, Kingston upon Thames, and Epsom & Ewell, they act for clients across the UK and internationally, providing compliant, HMRC-focused tax advice and support. For more information, visit www.taxaffinity.com or read more insights at www.taxaffinity.com/blog. Important Notice This article is for general information purposes only and does not constitute personalised tax advice. Tax treatment depends on individual circumstances. Professional advice should be sought before taking action. #UKTaxAdvice #TaxPlanning #SelfAssessment #BusinessTax #HMRCInvestigations #ForensicAccounting #CapitalGainsTax #InheritanceTax #LandlordTax #LimitedCompanyTax #TaxAffinityAccountants
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 Autumn Budget 2025 Tax Changes: What It Means for You, Your Business and Your Wealth
Expert Analysis & Practical Guidance from Tax Affinity Accountants As the Chancellor prepares to deliver the Autumn Budget on 26 November 2025, speculation is running high across the UK. Headlines, leaks and political messaging have made it increasingly difficult for taxpayers to separate rumour from reality. What is clear, however, is that this will be one of the most consequential budgets for families, investors, landlords, small businesses and high-net-worth individuals in recent years. At Tax Affinity Accountants, we have analysed the most credible, evidence-based predictions from economists, industry bodies and policy advisers — and distilled them into a clear, practical briefing so you can plan before changes take effect. As always, we stand ready to help clients review their affairs in advance of Budget Day. Key Themes Expected in the Autumn Budget Despite months of speculation over an income tax rise, the Chancellor appears to have stepped away from the idea of increasing headline rates. Instead, the Government is widely expected to pursue a combination of: ✔ Property & Wealth Measures ✔ Stealth Tax Increases via Threshold Freezes (Fiscal Drag) ✔ Higher Duties and Indirect Taxes ✔ Business Rates Rebalancing ✔ New Road/EV Taxation Models ✔ Targeted NIC and Employer-Cost Adjustments These changes will affect taxpayers differently based on income, assets, property holdings and business structure. Below we break down what may be coming — and what you should do now. 1. Property Taxes & Stamp Duty (SDLT) - High likelihood of reform The Treasury is under pressure to raise revenue from the property sector. Credible predictions include:
2. Capital Gains Tax (CGT) - Significant risk of increased rates or reduced reliefs CGT is strongly tipped for adjustment because it can raise money from asset-rich individuals without raising headline income taxes. Possible changes include:
3. Inheritance Tax (IHT) - High likelihood of rule tightening Think tanks and tax authorities have repeatedly highlighted IHT as an easy revenue source. Possible announcements:
4. Income Tax: Threshold Freezes & Fiscal Drag - Rates may remain the same - but tax bills will still rise Although the Government may avoid raising income-tax rates, it can still increase tax revenue by freezing thresholds, dragging taxpayers into higher bands. Who Will Feel It?
5. National Insurance & Employer Costs - Targeted changes possible Broad NI hikes appear unlikely, but smaller, targeted changes remain firmly on the table. Who Will Feel It?
6. Business Rates ReformLikely rebalancing - good for small businesses, harder on large premises Expected measures include:
7. EV & Road Tax Reform (Mileage Charging) - Strong likelihood of early announcements As fuel duty revenue collapses, the Government is expected to signal a new model:
8. Alcohol, Tobacco & Duty Increases - Likely given fiscal pressures Inflation-linked uprating of duties is widely expected. This will particularly impact:
Impact by Taxpayer Category - Quick Summary Basic-Rate Taxpayers
What You Should Do Now - Your Pre-Budget Checklist ✔ Book a tax planning review before Budget Day ✔ Review any planned disposals of property or investments ✔ Update wills and estate-planning documents ✔ Stress-test business cashflow and payroll costs ✔ Get SDLT, CGT and IHT modelling done early ✔ For businesses — prepare for business-rates changes ✔ For EV owners — assess long-term cost exposure Need Personalised Advice? Act Now. Tax Affinity Accountants can help you model different scenarios, protect your assets, reduce exposure to new taxes, and plan ahead with confidence. 📞 Get a call back today by filing in this form - Contact Form 🌐 Or visit: www.taxaffinity.com Our team of specialists are here to support individuals, landlords, investors, SMEs and high-net-worth clients with clear, proactive planning before any changes take effect. #AutumnBudget2025 #UKTaxUpdate #TaxPlanning #HMRC #SmallBusinessUK #LandlordTax #UKFinance #TaxNews #Accountants #TaxAffinity #SaveTaxLegally #Budget #autumnbudget By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert tax accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.  As the UK's Spring Budget 2025 is due soon it's worth now recapping the UK's Autumn Budget 2024 which introduced several pivotal changes that take effect from April 2025. These developments will significantly impact small business owners, self-employed individuals, and employees alike. Let's delve into the key adjustments and their potential ramifications on your finances and the broader economy.
Key Changes from the Autumn Budget 2024 1. Employers' National Insurance Contributions (NICs): Increased Rates and Adjusted ThresholdsFrom April 6, 2025, employers will experience a rise in NICs by 1.2 percentage points, bringing the rate to 15%. Concurrently, the threshold for these contributions will be lowered from £9,100 to £5,000. This adjustment means businesses will need to allocate more funds toward employment costs, potentially affecting recruitment plans and operational budgets. 2. Employment Allowance: Enhanced Support for Small Businesses. To counterbalance the increased NICs, the Employment Allowance will increase from £5,000 to £10,500 annually, effective from April 6, 2025. This boost aims to reduce tax burdens for smaller enterprises, allowing them to reinvest in growth and development. 3. Business Rates Relief: Sustained Discounts for Key Sectors. Businesses in the retail, hospitality, and leisure sectors will continue to benefit from a permanent 40% reduction in business rates, capped at £110,000 per business, starting from April 2025. This measure seeks to support high-street businesses and foster economic recovery in these industries. 4. National Living Wage: Substantial Increase. From April 1, 2025, the National Living Wage will rise by 6.7%, increasing the hourly rate to £12.21 for workers aged 21 and over. This change aims to improve earnings for employees but will also require businesses to adjust payroll budgets accordingly. 5. Capital Gains Tax (CGT): Rate Adjustments. From April 6, 2025, CGT rates will be revised, with the lower rate increasing from 10% to 18% and the higher rate from 20% to 24%. However, these changes do not apply to the existing 18% and 24% rates on the sale of second homes. Investors and property owners may need to reassess their asset disposal strategies in light of these changes. 6. Inheritance Tax (IHT): Threshold Freeze and Pension Implications. The IHT threshold will remain fixed at £325,000 until 2030. Additionally, from April 2027, unspent pension funds left to non-spouse beneficiaries will become subject to inheritance tax, making estate planning more critical than ever. 7. Air Passenger Duty: Increased Charges. From April 1, 2025, Air Passenger Duty will rise by up to £2 for each economy short-haul flight. Additionally, private jet passengers will see an extra 50% charge, with duties increasing up to £450 per passenger. This change may impact businesses reliant on frequent air travel. 8. Abolition of Non-Domicile Status. The government will abolish the non-domicile tax status from April 6, 2025, replacing it with a new residency-based tax system. This change will affect individuals who have benefited from non-domicile status for tax purposes and could influence international wealth structuring. 9. Fuel Duty: Ongoing FreezeFuel duty will remain frozen for another year, providing continued relief for businesses and individuals reliant on transportation and logistics. This freeze is intended to mitigate the impact of rising operational costs in other areas. Economic Implications of the Budget Changes These fiscal measures come as the UK economy navigates shifting inflation rates. As of February 2025, inflation had eased to 2.8%, providing some relief. However, rising business costs due to increased NICs and wages could lead to higher prices for goods and services, potentially contributing to renewed inflationary pressures. Navigating the Changes: Tax Affinity Accountants Are Here to Assist. Understanding and adapting to these changes can be complex. At Tax Affinity Accountants, we specialize in helping small businesses and self-employed professionals stay ahead in an evolving tax landscape. Our experienced team provides tailored tax advice to optimize tax positions, ensure compliance, and create effective financial strategies for the future. Take Proactive Steps Today! Don't wait until these changes take effect--act now to protect and maximize your financial position. Contact Tax Affinity Accountants today for expert guidance on tax planning, compliance, and business growth. With our expertise, you can navigate the 2025 tax changes confidently and ensure your business continues to thrive in a rapidly shifting economic environment. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. #AutumnBudget2024 #UKTaxes #SmallBusinessUK #SelfEmployed #CapitalGainsTax #InheritanceTax #TaxPlanning #TaxAffinity #BusinessGrowth #NICIncrease #NationalLivingWage #FinancialPlanning #UKEconomy #TaxConsultant #AccountingExperts  Expert tax accountants & advisors for small & medium sized business & individuals On 6th March 2024 the UK Chancellor announced the Spring Budget for the UK. There were quite a few positive changes and the main points to help plan ahead are below:
Child Benefit Changes Starting April 2024, parents will receive Child Benefit as follows: £25.60 per week (£1,331 annually) for the eldest child and £16.95 per week (£881 annually) for additional children. Presently, if either parent's income exceeds £50,000, the High Income Child Benefit Charge (HICBC) takes effect, requiring repayment of Child Benefit once income surpasses £60,000. This necessitates completing a self-assessment tax return. As of April 6, 2024, the threshold rises to £60,000 with a gradual taper, fully recouping Child Benefit when income exceeds £80,000. By April 2026, the clawback assessment will shift to a "household income" basis, pending HMRC adjustments. The 2024 threshold increase will lower the combined tax rate (HICBC, income tax, and NIC) on incomes above £60,000, encouraging parents to earn more. Eventually, transitioning to a "household income" basis should create fairer outcomes for families, albeit HMRC implementation challenges may arise. Changing the Non-Domiciled (non-dom) status and tax treatment The government plans to end the current tax treatment for UK resident non-domiciled individuals (non-doms) starting April 6, 2025. This regime, in place for over 200 years, allowed UK residents with permanent homes abroad to avoid UK tax on foreign income and gains (FIG) unless brought into the UK. It also shielded non-UK assets from Inheritance Tax. As of April 6, 2025, the current remittance basis will be replaced by a new residence-based test lasting four years for those who have been non-UK residents for at least the prior ten tax years. During this period, newcomers won't pay tax on foreign income or trust distributions brought into the UK. However, they'll lose personal allowances and CGT exemptions. After four years, individuals will be taxed like other UK residents on worldwide income and gains. Transitional rules apply: non-doms moving from remittance to arising basis in 2025/26 will be taxed on 50% of foreign income; reduced rates for pre-6 April 2025 FIG remittances till 2027; and Capital Gains Tax rebasing for non-UK assets. Business Investment Relief continues. From April 6, 2025, settlor-interested trusts lose tax protection unless they qualify for the four-year FIG regime. Overseas workday relief remains for the first three years, depending on opting into the new regime. Inheritance Tax shifts from domicile to residence-based from April 6, 2025, with assets within ten years of UK residency potentially liable. UK sited assets remain subject to IHT. These changes simplify the non-dom tax system, but complexities persist. Transitional provisions offer time for adjustment. Current non-doms should consult their Tax Affinity adviser promptly as these are significant changes. National Insurance Class 1 Changes (Employed) Starting from an annual income of £12,570 up to £50,270, employees pay Class 1 National Insurance Contributions (NICs). The rate is currently 10% (down from 12% since January 6 this year). Above £50,270, the rate remains 2% for additional earnings. From April 6, 2024, the main rate will decrease by another 2% to 8%, potentially saving employees up to £63 monthly (£754 yearly). Employers' NICs, at 13.8% over the lower threshold, remain unchanged. This reduction benefits employees and may ease pressure on employers regarding wage hikes. Self-Employment Changes Self-employed individuals pay Class 4 NICs from £12,570 to £50,270 at 9% (dropping to 8% from April 6, 2024). Above this threshold, the rate stays at 2%. Starting April 6, 2024, the rate decreases by another 2% to 6%. This saves £30 for every £1,000 of profit, up to £1,131 annually for those paying at the main Class 4 NIC rate. Class 2 NICs were abolished from April 6, 2024, offering a positive financial change for the new tax year. Capital Gains Tax When you sell residential property and make a profit, you might owe Capital Gains Tax (CGT), except when it's your main home, which is CGT exempt. If the property wasn't always your main home, only part of the gain is taxable. Currently, residential property gains are taxed at 18% for basic rate band profits and 28% thereafter. Starting April 6, 2024, the higher rate reduces to 24% for property sales. Reporting the sale within 60 days from completion is crucial. Sales exchanged before April 6, 2024, may still be taxed at 28%. Landlords affected by the abolishment of Furnished Holiday Lets tax benefits from April 2025 will see changes. From April 6, 2025, furnished holiday lettings will be treated as property investment businesses, losing several tax benefits:
Investments The Budget introduced measures to encourage individual investing and foster a stronger savings culture. Here are the key points:
VAT threshold increased The government is raising the VAT registration threshold from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000. These changes start on April 1, 2024. Over 28,000 businesses are expected to benefit by no longer needing to register for VAT in 2024-25. Conclusion Overall this is a much better budget than the previous autumn one presented in 2023. VAT announcement is decades overdue and the drop in NI thresholds don't make that much of a real world difference when price rise percentage is way higher then the percentage drop. And again the goverment did not address any of the large multinationals raking huge profits while small businesses and the public suffer. The sale of Natwest shares in a recession (that the government used tax payers money to bail out the bank recently) needs to be critically analysed more closely as to the effective timing of the sale and real time benefit for tax payers who directly paid for this out of their pockets. At times like these its even more important to have an experience and knowledgable tax accountant in your corner. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. |
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