Several tax changes are now in effect for taxpayers and businesses from 6 April. The changes are expected to raise an additional £455 million in tax for 2024/25.
The dividend allowance has been reduced to £500 from £1,000, impacting owner-managed businesses.
The capital gains tax (CGT) annual exempt amount has halved to £3,000. A new reduced CGT rate for residential property sales has been set at 24%, with the standard rate of 18% remaining the same.
Employee National Insurance Contributions (NICs) were cut by 2% to 8%, saving the average worker over £900 a year. However, both basic and higher rate tax thresholds are still frozen until 2028, likely pushing over a million taxpayers into higher tax rates.
The income limit for married couples' allowance increased to £37,000. For the self-employed, the main rate of Class 4 NICs dropped to 6%, and the requirement to pay Class 2 NICs was removed. The high-income child benefit charge threshold rose to £60,000, with child benefit payments increasing slightly.
The state pension is now up to £221.20 a week, and working tax credit elements also increased. Private pensions saw the lump sum allowance set at £268,275, with no lifetime allowance limit. The annual tax on enveloped dwellings (ATED) charges rose by 6.7% from 1 April 2024.
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