2024 In Review

With significant changes in the political landscape and the Labour Party returning to Government after 14 years, it’s no surprise that we’ve seen a raft of changes that will impact individuals and their tax planning.

Spring Budget

We started the year with Jeremy Hunt looking to pull a rabbit out of the hat in the Spring Budget before an anticipated general election. Whilst most allowances and thresholds were frozen, we did see a further 2% cut to employee’s NIC announced. With a pledge for it to support working people by suggesting when paired with the previous cut, it could save a working person up to £1,500.

State pensions increased by 8.5% in April 2024 under the triple lock, but with the freezing of personal allowance and basic rate bands it pushed many pensioners into paying tax or in many cases into a higher tax band.

The dreaded 60% effective tax rates remained at £100,000 and we continue to advise clients on ways to help reduce the impact of this.

Likewise, we’ve seen the impact of the reduced annual exemption from £6,000 to £3,000, and the reduction in the dividend allowance – once up at £2,000 now reduced to £500 – impact individuals and restrict the tax planning available, as well as bringing more people into self-assessment.

The big surprise from the Conservatives was to change the tax rules for non-domiciled individuals. This had been a key point for the Labour party and with the Conservatives announcement in March many people felt it was a reversal of the previous Conservative stance, with Jeremy Hunt previously quoted as saying

“Scrapping the non-dom status would be a terrible thing to do, we would wave goodbye to £8billion of capital investment in the UK. We will never do that”

You’ll find a more detailed analysis of these changes over the page in an article about Non-Doms

Following the election of the Labour Party in July, speculation was rife about the potential tax changes that could impact individuals. Whilst in their manifesto they had clearly stated they would not touch income tax or employee’s NIC,  they were clear that those with the broadest shoulders should bear the heaviest burden.

This led to a very busy period through the summer and early autumn as clients considered what sensible steps they could be taking.

With rumours swirling that increases in CGT to 40% and major changes to IHT were coming, it was no surprise that many looked to take action. Although in many cases, the advice remained to  make decisions based on good long term commercial planning rather than being driven by the concern around tax rises. And on this basis, many of our clients looked to accelerate something they were already planning to do, whilst they had the certainty of the current tax rates.

The Autumn Budget

Finally, on 30 October 2024, we had some more certainty with the Autumn Budget. Capital Gains Tax rates were increased from 20% to 24% for higher rate taxpayers, so not as bad as initially feared.

But significant inheritance tax changes were announced to Agricultural Property Relief and Business Property Relief, changing the tax landscape for those owning farms and businesses. And with pensions now brought into the scope of Inheritance Tax, this adds further potential changes to the outlooks of those with significant pension pots.

Whilst the changes have been highly reported, our advice centres on the actions you should be taking now the dust has settled slightly.

Finally, as we approach the Tax Return filing deadline of 31 January HMRC have recently released an article with some of the excuses they have received from taxpayers as to why they did not complete their return on time last year.

So, for a little light relief at this time of year…some of my personal favourites…

1. My pet goldfish died
2. I had a run-in with a cow
3. After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else
4. My wife won’t give me my mail
5. My husband told me the deadline was 31 March, and I believed him
6. I’ve been far too busy touring the country with my one-man play
7. My bad back means I can’t go upstairs. That’s where my tax return is
8. I’ve been cruising round the world in my yacht, and only picking up post when I’m on dry land
9. Our business doesn’t really do anything
10. I’ve been too busy submitting my clients’ tax returns (from a London accountant!)

I hope you’ll enjoy this festive edition. And from all of us here at Scrutton Bland we wish you a very Merry Christmas and warm wishes for 2025.