Navigating Budget Changes: How they affect Your Business and How we can help you

With this budget dominating the news and social media, you’ve likely heard about the significant changes that were announced. But what do these changes mean for your business, and how can we assist you in navigating them?

We’ve summarised the key tax changes below, but if you’d like a more in-depth understanding, Jo is available to guide you through it all in an upcoming workshop or webinar. Secure your free spot, and if you’re already an existing client, please use code BWClient using this link.

Workshop & Webinar Dates:

• Tuesday, 12th November at 4 pm – Webinar
• Friday, 15th November at 12 pm – ‘Lunch and Learn’ in our office

Supporting Employers with Payroll Adjustments

If you employ staff, you may wonder how the changes to the National Minimum Wage (NMW) and Employer’s National Insurance (NI) will impact your payroll. We’re here to help! Contact us, and we’ll recalculate your October figures using the new rules, helping you anticipate any impact on your expenses.

In December, we’ll also offer focused Workshops and Webinars on employment obligations to clarify your responsibilities and make planning easier. You can book using the same link above.

Key Budget Changes to Note

National Insurance Contributions (NIC)

• Threshold Adjustment: The earnings threshold for employers’ Class 1 contributions drops from £9,100 to £5,000.
• Rate Increase: Employers’ NIC rate rises from 13.8% to 15% starting 6th April 2025.
• Employment Allowance Increase: Eligible employers will see an increase from £5,000 to £10,500.

Capital Gains Tax (CGT)

• Rate Changes: Effective immediately:
  • Basic Rate: Increased from 10% to 18%
  • Higher Rate: Increased from 20% to 24%
• Timing for Lower Rates: Disposals made before 30th October 2024 will still be taxed at the previous, lower rate.
• Annual Exempt Amount: This remains at £3,000 for 2025/2026.

Inheritance Tax (IHT)

• Frozen Bands: No changes in rates or allowances; bands are now frozen until 5th April 2030.

Pension Death Benefits

• New Inclusion: From 6th April 2027, unused pension funds and death benefits will be included in a person’s estate for IHT.
• Reporting Obligation: Pension scheme administrators will be responsible for reporting and paying any inheritance tax on these benefits.

VAT

• Thresholds Remain Unchanged: As of 1st April 2025:
  • Registration threshold: £90,000
  • Deregistration threshold: £88,000
• Private School Fees: From 1st January 2025, VAT will apply to private school fees at the standard rate.

Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA)

• Expansion for Landlords & Sole Traders: MTD will extend to those with incomes over £20,000 by the end of this parliament.
  • April 2026: Applies to incomes over £50,000
  • April 2027: Applies to incomes over £30,000

Furnished Holiday Lettings (FHL)

• Tax Treatment Changes: Legislation will end the specific tax treatment for FHL properties.
• Effective Dates: These changes begin on or after:
  • 6th April 2025 for Income Tax and CGT
  • 1st April 2025 for Corporation Tax

Van vs. Car Classification

• Updated Classification: From 6th April 2025, most double cab pick-ups will no longer qualify as vans for benefit charges.
• Transitional Provisions: Employers with existing vehicles can retain van classification until disposal or until 5th April 2029, whichever comes first.

If this all sounds too complicated, then we’re committed to helping you understand and adapt to these changes seamlessly. Our workshops and webinars are designed to provide clarity and actionable insights, so don’t hesitate to join us.