The Chancellor of the Exchequer has delivered his Spring Budget to Parliament.

The Spring Budget 2024 aims to halve inflation, reduce debt and grow the economy.

Key points arising in the Budget Statement affecting tax:

  • A reduction in the rate of Class 1 primary (employees) National Insurance contributions (NICs) from 10% to 8% from 6 April 2024.
  • A reduction in the rate of Class 4 (self-employed) NICs from 8% to 6% from 6 April 2024.
  • The high income child benefit charge (HICBC) threshold to be increased from £50k to £60k, with the level at which child benefit is fully repaid increased to £80k, from the 2024–25 tax year onwards. HICBC will also be assessed on a household-basis rather than an individual basis by April 2026, following consultation.
  • The higher rate of capital gains tax on residential property gains will be cut from 28% to 24% from 6 April 2024.

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HMRC relax Self-Assessment penalty rules

HMRC have confirmed that Self Assessment (SA) taxpayers will not be charged the 5% late payment penalty if pay their tax or set up a payment plan by 1 April 2021.

The payment deadline for SA is 31 January and interest is charged from 1 February on any amounts outstanding. Normally, a 5% late payment penalty is also charged on any unpaid tax that is still outstanding on 3 March. But this year, because of the impact of the Covid-19 pandemic, HMRC are allowing additional time to pay or set up a payment plan.

Companies House pauses strike-off again

Companies House has temporarily paused the voluntary and compulsory strike-off processes for one month from 21 January until 21 February 2021.  It says that its strict adherence to the government’s COVID-secure guidance had reduced the number of office staff. This has led to delays in processing correspondence, documents and forms.

The one-month pause follows a similar pause last year and applies to the processing of both voluntary and compulsory company strike-offs.  It intends to review the position before the end of the one month period.

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Bounce Back Loan repayment terms extended to 10 years

Businesses that took out government-backed Bounce Back Loans to get through Covid-19 will now have greater flexibility to repay their loans, the government has announced.

Bounce Back Loan borrowers will now have the option to tailor payments according to their individual circumstances with the option to delay all repayments for a further six months.

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Record £4bn tax deferred

A record £4.1bn in tax was deferred under time to pay (TTP) arrangements in the run-up to the 31 January self-assessment deadline, according to data obtained by Price Bailey, which warns that some taxpayers will struggle to meet larger than usual payment demands

Jay Sanghrajka, tax partner at Price Bailey, said: “It is likely that the value of TTP arrangements will have surged even higher in the weeks leading up to the deadline.

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