Navigating the 2024/25 Tax Changes for UK Entrepreneurs
Let’s break down the latest tax updates for the 2024/25 tax year, starting on 6 April 2024. Let’s guide you through what’s changing and what stays the same. After all, staying on top of these changes is crucial for every UK entrepreneur and small business owner out there. So, let’s dive in!
Income Tax: The Basics and Beyond
For those of us in England, Northern Ireland, and Wales, the income tax rates haven’t seen a shake-up this time around. Here’s a quick rundown:
- Basic rate taxpayers will continue to pay 20% on income up to £37,700.
- Income between £37,701 and £125,140 falls into the Higher rate category, taxed at 40%.
- And for the highflyers, earnings over £125,140 are taxed at the Additional rate of 45%.
Our friends in Scotland, remember, your rates are set by the Scottish Government, so keep an eye out for those specifics.
Personal Touches: Allowances and Benefits
The personal allowance remains at £12,570. But, if your adjusted net income tiptoes over £100,000, the allowance decreases by £1 for every £2 of income above this threshold, phasing out entirely at £125,140.
For those in love, the marriage allowance lets you transfer £1,260 of your personal allowance to your better half, provided neither of you pays tax above the basic rate.
And for the golden oldies, if either you or your partner were born before 6 April 1935, the married couple’s allowance could be a boon, set at £11,080 for this tax year.
Dividends and Savings: Keeping What’s Yours
Dividend earners, you’ve got a £500 allowance to shelter some of that income, with tax rates sliding up from 8.75% to 39.35% depending on how much you earn.
Savers, there’s good news! Basic rate taxpayers get a £1,000 allowance, and higher rate taxpayers get £500. However, if you’re in the additional rate camp, I’m afraid there’s no allowance for you.
Capital Gains: The What and How Much
The capital gains tax annual exempt amount has been set at £3,000 for this year. For most, gains will be taxed at 10% within the basic rate band. Cross that line, and it jumps to 20%, with higher rates for gains on residential property.
How Can Jon Davies Accountants Help?
Navigating the tax landscape can feel like a trek through thick fog. That’s where we come in – consider us your GPS. Whether you’re puzzling over your personal allowance or deciphering dividend taxes, we’re here to clear the way.
Ready to optimise your tax position? Reach out to Jon and our team for tailor-made advice that makes sense for you and your business. We’re just a phone call or email away from helping you navigate the tax year with confidence and clarity.
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