We can all be befuddled by the chancellors budget announcements but what does it mean to you? At the BFA we’ve put together some of the most relevant pieces of information that will relate to you and your business.
Main rate of National Insurance cut from 12% to 10% from 6 January, affecting 27 million people
Class 2 National Insurance – paid by self-employed people earning more than £12,570 – abolished from April
Class 4 National Insurance for self employed – paid on profits between £12,570 and £50,270 – cut from 9% to 8% from April
The National Living Wage will increase. From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44, with the age threshold lowered from 23 to 21 years old.
- 21 and over, £11.44, up by £1.02, 9.8%
- 18-20 year old rate, £8.60, up by £1.11, 14.8%
- 16-17 year old rate, £6.40, up by £1.12, 21.2%
- Apprentice rate, £6.40, up by £1.12, 21.2%
Business Rates and Tax Relief Extensions: Business rates will continue at the current 75% for an additional year, and the rate multiplier for small businesses will remain unchanged for the 2024/25 period. Additionally, the period for tax reliefs will be extended.
HMRC to rewrite guidance around the tax deductibility of training costs for sole traders and the self-employed. This will provide more clarity to business on what costs are deductible, and ensure that self- employed and sole traders can be confident that updating existing skills, or maintaining pace with technological advances or changes in industry practices, are allowable costs for tax purposes.
The Making Tax Digital for Income Tax Self-Assessment threshold will be maintained at £30,000, and changes will be made to simplify and improve the system from April 2026
£50 million will be spent on a two-year apprenticeships pilot in England, to look at how starts can be encouraged in growth sectors, and to address barriers to entry in high-value apprenticeships.
Consultation on whether savers get the right to pick the pension scheme their employer pays into – possibly allowing them to have one pension pot for life
Alcohol duty has been frozen until 1 August 2024.
