Tag: new tax year

Early Birds! Over 295,000 file returns in the first week of new tax year

Almost 300,000 Self Assessment customers filed their tax return in the first week of the new tax year, almost 10 months ahead of the deadline, HM Revenue and Customs (HMRC) has revealed. 

Customers can file their Self Assessment returns for the 2023 to 2024 tax year between 6 April 2024 and 31 January 2025.  

Almost 70,000 people filed their return on the opening day this year (6 April) and HMRC is encouraging people to do it early and not to leave it until January. 

Visit GOV.UK to find out more about Self Assessment and how to file a tax return.  

By filing tax returns early, people can take their time to complete their returns – making sure the information is accurate and avoiding the stress of last-minute filing.  

It can also help with budgeting and helping spread the cost of their tax bill. Customers can set up a budget payment plan to make weekly or monthly direct debit payments towards their next Self Assessment tax bill. 

Refunds of overpaid tax will be paid as soon as the return has been processed. Customers can also check if they are due a refund in the HMRC app.  

In recent years, HMRC has seen more and more customers file their tax returns early. Last year, more than 246,000 people submitted their Self Assessment between 6 and 12 April 2023. 

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Filing your Self Assessment early means people can spend more time growing their business and doing the things they love, rather than worrying about their tax return.  

“You too can join the thousands of customers who have already done their tax return for the 2023-24 tax year by searching ‘Self Assessment’ on GOV.UK and get started today.” 

HMRC has updated guidance on filing tax returns early and help around paying tax bills on GOV.UK.  

Anyone who is new to Self Assessment and thinks they might need to complete a tax return for the 2023 to 2024 tax year can use the Self Assessment online tool to check whether they need to register for Self Assessment and submit a return. 

People may need to complete a tax return for the 2023 to 2024 tax year and pay any tax owed if: 

·         they are a self-employed individual with an income over £1,000 

·         they have received any untaxed income over £2,500 

·         they are renting out one or more properties 

·         they claim Child Benefit and they or their partner have an income above £50,000   

·         they are a partner in a partnership 

·         their taxable income earned from savings and investments is more than the £10,000 personal savings allowance 

·         their taxable income earned from dividends is more than £10,000 

·         they have paid Capital Gains Tax on assets that were sold for a profit above the Capital Gains threshold 

A full list of who needs to complete a tax return is available on GOV.UK. 

Pensioners are required to pay Income Tax on any taxable income, including their pension income, above their Personal Allowance threshold. There are different ways to pay any tax owed, depending on the individual’s circumstances, including: 

·         if they already complete a Self Assessment tax return, they will need to report and pay via this route 

·         if they have a PAYE tax code, HMRC will automatically collect any tax through their tax code 

Alternatively, if a pensioner does not already pay tax via Self Assessment or PAYE, HMRC will send them a Simple Assessment summary.

The Simple Assessment will tell them how much Income Tax they need to pay and the deadline – usually by 31 January following the end of the tax year. HMRC produces the Simple Assessment from the information it already holds so people do not need to do anything – there is no form to complete. More information about Simple Assessment is available on GOV.UK. 

It is important that customers let HMRC know if there are any changes in details or circumstances such as a new address or name, or if they are no longer self-employed or their business has closed.

They should not assume someone else will update HMRC on their behalf.

If customers no longer need to do Self Assessment, they will need to tell HMRC. There are videos on YouTube that explains how to stop Self Assessment. 

Criminals use emails, phone calls and texts to try to steal information and money from taxpayers. Before sharing their personal or financial details, people should search ‘HMRC phishing and scams’ on GOV.UK to check the sender or caller is genuine. 

Customers should never share their HMRC sign-in details. Someone could use them to steal from them or claim benefits or a refund in their name. 

Income Tax rise for higher earners as new tax year begins

Additional half a billion pounds raised for public services

Changes to income tax in Scotland have come into force and are estimated to raise more than half a billion pounds of additional revenue this financial year to support vital public services.

The tax rates for earnings between £12,571 and £43,662 remain the same while earnings above £43,663 are now taxed at the Higher tax rate of 42%.

The threshold at which people pay the Top Rate of tax has reduced from £150,000 to £125,140 with earnings over that threshold now taxed at 47%.

According to the Scottish Fiscal Commission, these changes will raise £129 million in 2023-24.

The Higher Rate threshold will also remain at its 2022-23 level, applying to earnings over £43,662, which will increase revenue by a further £390 million when compared to uprating the threshold by inflation, according to Scottish Government estimates.

As the new financial year begins, Scottish taxpayers are also being encouraged to check if their tax code on their first payslip is correct – people paying Scottish Income Tax should have a tax code that starts with an S.

Deputy First Minister Shona Robison said: “The decisions we have made on income tax are fair and progressive by ensuring that those who can, contribute more. They strengthen our social contract with the people of Scotland who will continue to enjoy many benefits not available in the rest of the UK such as free prescriptions.

“The additional revenue will help us invest in our vital public services including the NHS, above and beyond the funding received from the UK Government.  At the same time, the majority of taxpayers in Scotland will still be paying less income tax than if they lived in the rest of the UK.

“Now that the new financial year has started, I’d also encourage people to check that the tax code is correct on the first payslip they get. If you think your tax code is wrong, you can check your details with HMRC who will be able to help.”

The new Scottish Income Tax bands and rates for the financial year 2023-24 are:

BandBand nameRate
£12,571* – £14,732Starter Rate19%
£14,733 – £25,688Basic Rate20%
£25,689 – £43,662Intermediate Rate21%
£43,663 – £125,140**Higher Rate42%
Over £125,140Top Rate47%

* Assumes individuals are in receipt of the standard Personal Allowance.

** Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.

The Personal Allowance threshold remains reserved and is set by the UK Government at the UK Budget.

New business tax year begins

Businesses across the UK can take advantage of the Chancellor’s capital allowances package from today as the new business tax year begins.

  • The new business tax year comes in today 1 April 2023, with a new regime to boost investment and spur UK growth
  • £27 billion cut to corporation tax, via Chancellor’s new full expensing policy, expected to boost investment by 3% in each of the next three years
  • Other tax changes coming into force include more business rates relief, extension to the fuel duty cut and a £450 income tax cut for carers.

The package, announced at Spring Budget, comprises 100% full expensing and a 50% first-year allowance. It will mean the UK has the most generous capital allowance regime in the OECD worth £27 billion over the next three years, amounting to an effective £9 billion a year tax cut for companies.

The OBR expects this regime to boost investment by 3% over three years.

To mark the milestone, Financial Secretary to the Treasury visited Brompton Bikes in Greenford, London, who’ll be using full expensing to stimulate their growth.

Victoria Atkins, Financial Secretary to the Treasury, said: “We are determined to make the UK the best place in the world to do business, which is why from today businesses can start to benefit from the raft of tax cuts on offer to boost their growth.

“With full expensing, the more a company invests the less tax they’ll pay, and I encourage companies of any size to take full advantage of this world-leading reform.”

With the new 25% corporation tax rate coming in for the top 10% most profitable companies from today, and the super-deduction ending yesterday, the Chancellor used his Spring Budget to ensure that the UK’s tax system fosters the right conditions for enterprise, investment and growth.

Full expensing lets companies deduct 100% of the cost of certain plant and machinery investments from their profits before tax. It is available from 1 April 2023 to 31 March 2026. It provides the same generosity as the super-deduction, saving firms up to 25p in every £1 of qualifying investment and is for main rate assets – such as construction, warehousing and office equipment.

The 50% First-Year Allowance lets companies deduct 50% of the cost of other plant and machinery, known as special rate assets, from their profits during the year of purchase. This includes long life assets such as solar panels and lighting systems.

Minister Victoria Atkins visited Brompton Bikes in Greenford this week to see how these capital allowances will be used to help the firm invest and grow. The minister toured their factory, viewing a brand new state-of-the-art Autobraze machine and the production line. She also met a selection of 15 trainees currently on Brompton’s training programme.

Phill Elston, Operations Director at Brompton Bicycle, said: “The announcement of a super deduction replacement is great news for us. In previous years it has meant we could invest significantly in our production capabilities, upgrading equipment and building a more progressive factory; which has seen us move from making circa. 45,000 bikes per year in 2019, to around 100,000 bikes per year in 2022.

“Our mission is to improve how people travel around cities, which in turn creates happier communities, and the new expensing scheme helps to accelerate that goal.”

Other tax measures taking effect today include new domestic and ultra-long Air Passenger Duty bands.

For passengers flying in economy class, the new domestic band will be set at £6.50, a 50% cut to bolster UK-wide connectivity, while the new ultra long-haul band will be set at £91, meaning those who fly the furthest will pay the greatest level of duty.

Transport Secretary Mark Harper said: “Transport binds the United Kingdom together, and this cut to Air Passenger Duty will make travelling between our family of nations easier than ever.

“Boosting transport links between our four nations sustains jobs, creates opportunities and is an essential part of this Government’s plan to grow the economy.”

Further tax measures include:

  • To help household budgets further, the planned 11 pence rise in fuel duty has been cancelled, maintaining last year’s 5p cut for another twelve months, saving a typical driver another £100 on top of the £100 saved so far since last year’s cut.
  • More business rates relief, as part of the Chancellor’s £13.6 billion package from 2022’s Autumn Statement. This includes the freezing of the multiplier and the introduction of 75% relief for retail, hospitality and leisure businesses, helping the high street to thrive and compete with online firms.
  • Extending creative sector reliefs: theatres, orchestra and museums and galleries will benefit from a further 2 years of tax relief rates of 45%/50%. The museums and galleries exhibitions tax relief sunset clause will be extended for a further 2 years to allow these organisations to fully benefit from the extension of the highest rates.
  • The Annual Investment Allowance (AIA), an existing measure which also supports business investment, has been increased permanently to £1m today. This covers the investment needs of 99% of UK businesses.
  • Rebalancing the rates of Research and Development Expenditure Credit and the R&D SME scheme to ensure taxpayers’ money is spent as effectively as possible. As a result, today the UK now offers the joint-highest uncapped headline rate of R&D tax relief support in the G7 for large companies.
  • The government also committed to considering the case for further support for R&D intensive SMEs, and at Spring Budget announced that from today there will be an increased permanent rate of relief for the most R&D intensive loss-making SMEs. To support modern methods of innovation, for accounting periods beginning on or after today, businesses will also be able to claim for the costs of datasets and cloud computing under the R&D tax reliefs.
  • Expanding the Seed Enterprise Investment Scheme (SEIS) to help more UK start-ups raise higher levels of finance. This package will help over 2,000 start-up companies access finance.
  • Expanding the availability and generosity of the Company Share Option Plan (CSOP) scheme which will widen access to CSOP for growth companies and simplifying the process to grant options under the Enterprise Management Incentives (EMI) scheme.

On 6 April 2023 personal tax changes taking effect include removing tax-barriers that the medical community have made clear stop doctors working, delivering on the Prime Minister’s priority to cut NHS waiting lists so people can get the care they need more quickly.

The pensions annual tax-free allowance will increase by 50% from £40,000 to £60,000, the Money Purchase Annual Allowance will rise from £4,000 to £10,000, and the Lifetime Allowance charge will be removed.

The Office for Budget Responsibility estimate around 15,000 individuals will remain in the labour market because of the changes to the annual and lifetime allowances, many of whom will be highly skilled individuals, including senior doctors in the NHS.

Qualifying Carers Relief will be uprated with inflation from 6 April 2023 to representing a £450 per year income tax cut for carers. The uprating increases the amount of income tax relief from £10,000 to £18,140 plus £375-450 per week for each person cared for.