Money Matters - February 2024 Accounting Newsletter

In this edition, we look at changes to national insurance, the cash basis and ISA reforms.

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As the tax year ends and another begins, the focus on maximising tax reliefs and allowances sharpens. While the Autumn Statement included some measures designed to claw back earnings for some, including cuts to national insurance contributions, the scales are tipped against higher earners with frozen tax thresholds and allowances.

Incorporated businesses can utilise enhanced reliefs such as full expensing being made permanent. Those claiming R&D relief will need to negotiate an amended tax regime. The self-employed can benefit from the NIC changes.

The articles in this issue are:

  • Corporate tax update Full expensing, which was due to end on 31 March 2026, will be permanent.
  • Living with fiscal drag – tax impact on higher earners A wide range of tax measures featured in November’s Autumn Statement but they did nothing to reduce fiscal drag. Higher earners have lost reliefs and allowances at certain income levels and are left unduly penalised.
  • Changes boost the self-employed November’s Autumn Statement included some good news for the self-employed, with class 2 NICs abolished in most cases, a cut to the main rate of class 4 NICs, the expansion of the cash basis for calculating trading profit and further relaxation of MTD rules.
  • Make way for basis period reform Any unincorporated business that does not make up accounts to 31 March, 5 April, or dates in-between, will have to make changes to the way they calculate taxable profits from 2023/24.
  • ISA reforms loosen restrictions ISAs will be more user friendly from April 2024 following a range of reforms. Although the changes could have gone further, significantly, multiple subscriptions to ISAs of the same type will now be possible during each tax year.

We hope you enjoy reading the newsletter. Please get in touch if you need help or advice on any of the topics covered.

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