Managing Principal Viewpoint
Get ready to navigate
Despite this spring’s rather mixed weather, I hope you’re enjoying the additional daylight hours and (slightly) warmer temperatures! 2024’s second quarter is underway and, as I write, it’s still unclear when the general election will take place. Regardless of the result, the political landscape will almost certainly look very different by the end of the year.
This uncertainty challenges decision-making for both businesses and personal finances. In the last Shipshape, I talked about the need to plan. This is still true, but it can be difficult if you don’t know what avenues will be open, what will be closed, or which are full of obstacles to carefully manoeuvre around.
In our discussions with clients, some are indeed making the most of what is certain now. Others are trying to gather as much insight to make sense of changes, run projections and test out different ideas. There are also those who are sceptical about a proposed tax or regulatory change and are deferring tackling it till they’re certain of the reality.
In this Shipshape, we’ve endeavoured to serve up information to help with all these different perspectives and ensure you navigate the journey ahead smoothly.
Rationing the treats
Many were hoping the Chancellor’s Budget in March would have plenty to sweeten voters. On a positive note, there was a further drop in the employee and self-employed national insurance rates, along with a rise in the high income benefit charge threshold and the VAT registration threshold.
The main personal allowance thresholds, however, were again left untouched and the dividend tax threshold has reduced further, as previously announced. This has resulted in many people paying more tax.
A number of the new initiatives proposed by the Chancellor came with a consultation period and a 2025 (or beyond) launch date. Obviously, a change of government or Cabinet dynamic could affect the roll-out of these further down the line. You can find a summary of the Budget on page 2.
We’ve also explained in more detail the implications of the changes to capital gains tax for residential property, furnished lettings relief and non-dom status on page 9. Additionally, we have an article on our website about the current state of play with pension contributions.
Igniting growth
Few are in doubt that the UK economy needs a much-needed boost. We now know that 2023 ended in a recession, and while inflation dipped in February, the Bank of England cautiously kept interest rates at 5.25%.
One sector singled out for further help by the Chancellor was the broadcast industry. On page 3 you’ll see an overview of the tax credit regime which launched at the start of the year and which will be enhanced over the coming one.
Changes previously announced to R&D tax relief for businesses in general came into effect on 1 April, and this includes support for ‘R&D-intensive’ SMEs. We’ve explained what the changes mean on page 4.
Overseas companies looking to set up UK subsidiaries often experience delays when setting up a UK bank account. We are very grateful to Metro Bank for helping us explain the information requirements which banks now need to fulfil (page 7).
For employers, changes are on the horizon which will impact payroll systems. See page 5 and page 6 to familiarise yourself with those changes and allow your organisation time to prepare and be compliant.
Ignorance isn’t bliss
We’ve also given another reminder about the basis period changes that have now come into effect (and which many hoped wouldn’t), and we’ve flagged the new rules that require online platforms such as Airbnb and Etsy to make seller earnings accessible to HMRC.
Download your copy of Shipshape Spring 2024
A helping hand
However the coming months pan out on the political and economic front, don’t forget you’re not alone in your journey though it. The Shipleys team is happy to help you gather the information you need to make sense of the changes and keep yourself on course with your goals. Please do contact us for advice.
Steve Foster, Managing Principal
Shipshape articles are intended to create awareness of issues and specific advice should be obtained before taking action, or refraining from taking action in relation to the topics covered. If you would like advice or further information, please speak to your usual Shipleys contact.
Copyright © Shipleys LLP 2024
Related Resources
Chancellor’s Budget Summary – March 2024
Changes for research and development tax breaks
