2024/25 Tax Rates: UK Updates

Personal Tax Allowances and Income Tax 

Staying informed about your personal tax allowances and income tax rates for the 2024/25 tax year is vital. Here’s an overview:

Annual Allowances: 

• What is an annual allowance? An annual allowance is the the amount you can pay into your pension tax free. For 2024/25 this tax rate has increased from £40,000 to £60,000.

Lifetime Allowance (LTA)

• The LTA charge, a penalty you had to pay if your pension exceeded the £1.073m cap set by the Government has now been removed with LTA set to be abolished from 2024/25. 

Income Tax Rates and Bands for 2024/25

• There will be a change in England, Northern Ireland and Wales to the additional rate threshold (45%) with a falling from £150,000 to £125,140. In Scotland, the top rate threshold will fall to £125,140 with higher and top rate tax increasing by 1% to 42% and 47% respectively. 

R&D tax relief for SMEs 

R&D tax relief is an important incentive for small and medium-sized enterprises (SMEs) engaged in innovation. The key changes for 2024/25 are:

• A higher R&D tax relief for ‘R&D intensive SMEs’ has been introduced for 2024/25.  This will enable loss-making SMEs to claim a payable credit of 14.5% for qualifying R&D expenditure. This will apply to SME companies whose qualifying R&D expenditure comprises at least 40% of total expenditure. 

Stay up to date with R&D tax reliefs and how they could benefit your business, for further advice please contact one of our experts.

Corporation Tax  

Corporation Tax is calculated based on a businesses profits. Here's what you need to know for 2024/25:

• The main rate of Corporation tax will rise from 19% to 25% for companies with profits over £250k for 2024/25.

Corporate tax rates are dependent on the level of a company’s profit as well as a few other factors, it’s important for businesses to stay up to date with this.

Capital Gains Tax

Capital Gains Tax (CGT) is a crucial element of the UK tax system, applicable to individuals and businesses. Here's the latest on CGT for 2024/25. 

• The annual exempt amount for Capital Gains Tax has been reduced to £3,000 for individuals and £1,500 for most trusts.

CGT rates depend on your income level and the type of asset sold. Staying informed about the latest CGT rates and regulations is essential for compliance and financial planning. 

ISA allowance 

Individual Savings Accounts (ISAs) allowances are a set tax free amount which can be placed into an ISA account. The ISA allowances for 2024/25 are as follows:

• The annual ISA allowance remains at £20,000 for adults in 2024/25. The Junior ISA allowance is £9,000.

For further advice on the ISA allowance, please contact one of our personal tax experts.

National Insurance Contributions (NICs) 

Understanding National Insurance Contributions (NICs) is crucial as they fund various state benefits. 

• For 2024/25 tax rates and thresholds may have changed. It's advisable to check the latest HMRC guidance for the most up-to-date information.

Understanding NICs is essential for both employees and employers for accurate tax payments and benefit entitlements. For assistance, contact our team for expert advice. 

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If you would like to speak to an adviser about your individual or business tax challenges, please get in touch.

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