UK Tax Changes for 2024

UK Tax Changes for the Year 2024

As we look ahead to the year 2024, several tax changes will come into effect in the United Kingdom. These changes will impact various aspects of the economy, including the minimum wage, national living wage, and taxes for self-employed sole traders. In this blog post, we will explore these changes in detail.

Increase in the Minimum Wage and National Living Wage

One of the significant tax changes for the year 2024 is the increase in the minimum wage and national living wage.

Tax thresholds for Class 2 NICs and Class 4 NICs

2024/25 thresholds

• No National Insurance incurred between £0 to £6,724

• Small profits threshold for Class 2 NICs No longer applies

• Lower profits limit for Class 4 NICs £9,880

• Upper profits limit £50,270

Here are the National Insurance rates for 2024:

• Class 4 NICs up to the upper profits limit at 8 per cent (for 2024/25 tax year)

• Class 4 NICs above the upper profits limit at 2 per cent (for 2024/25 tax year)

Changes to wage rates for employers

• Rate from April 2024

• Rate from April 2023

• National living wage £11.44

• The rate for 21-22 year olds National living wage rate applies £10.18

• The rate for 18-20-year-olds £8.60

• Rate for 16-17 year olds £6.40

• Apprentice rate £6.40

Check the government website for more information

Tax Changes for Self-Employed Sole Traders

Self-employed sole traders play a vital role in the UK economy. They contribute to economic growth, create jobs, and provide goods and services to the public. In recognition of their importance, the government has introduced some tax changes that will affect self-employed individuals in 2024.

The amount of income tax you pay on your trading profits is the same as if you were employed.Here are the current rates of Income Tax for England, Northern Ireland and Wales, based on the standard Personal Allowance of £12,570.

£0 to £12,570 - 0%

£12,571-£50,270 - 20%

£50,271-£125,140 - 40%

SA Class 2 & 4 NI contributions

ClassRate for tax year 2023 to 2024

Class 2: £3.45 a week

Class 4: 9% on profits between £12,570 and £50,270
2% on profits over £50,270

You can see National Insurance rates for past tax years.

How to pay

You must pay your income Tax and Class 2 & 4 NI via self-assessment. At MBM-Accountex, we can help you file your annual tax return to HMRC. Contact our team today.

Conclusion

The year 2024 will bring significant tax changes in the United Kingdom. The increase in the minimum wage and national living wage will provide relief to low-income workers and address income inequality. The tax changes for self-employed sole traders aim to simplify the tax system and support entrepreneurship. Individuals and businesses must stay updated on these changes and seek professional advice to ensure compliance and maximize benefits.

Get in touch with MBM-Accountex today for accounting needs.

info@mbm-accountex.co.uk

Office: 01582 292 021 MOB: 07448424331