NEWS

At the 2024 Autumn Budget, changes surrounding employers' national insurance were announced.  For most employers this will lead to additional tax due.

- The increase in employers NI is from 13.8% to 15%.

-The reduction of the threshold of when employers NI starts to be paid is now £5,000, down from the previous threshold of £9,100. This creates a minimum tax charge of £615 on all employees.

We have all heard the saying that it's 'Tax Deductible' and that payment will reduce your tax bill. How does that work for your business, say a Limited company?

1) The deduction needs to be related to the trade, or as HMRC puts it. 'Wholly, exclusively, and necessarily for business.  

2) Evey £ spent on expenses will reduce your tax bill by between 19% and 25% depending on business size. For example, £1,000 spent on advertising will save you between £190 and £250 in tax. 

3. Some expenses can be beneficial to this formula such as pension contributions, directors' salary, and electric / hybrid car purchases.

There has been increased scrutiny from Tax Inspectors who are using Artificial Intelligence tools when reviewing submitted tax returns. Therefore, it is particularly important that tax returns are completed correctly.

There is lots of online guidance and help available but better still seek out professional advice to help fill out your return correctly. Please see the content section.

If you have gaps in your National Insurance record from 2006-07 onwards, you may have extra time to fill them and boost your state pension. But you need to act soon - if you request a callback from the DWP before 5 April 2025, you can still take advantage of this extension. After that date, you'll only be able to backfill contributions for up to six years. 

Employers will need to consider wage increases to both the National Living wage and the National Minimum wage.

From 1 April 2025, the National Living Wage will increase to £12.21 for employees aged twenty-one and above.

At the same time, the National Minimum wage rate will increase to:

1. £10 for employees aged 18-20.
2. £7.55 for employees who are under eighteen.
3. £7.55 for apprentices.