Personal Tax changes coming in from 6 April 2024 – are you ready for them? By Jennie Brown, tax partner at Streets Chartered Accountants
Jennie Brown, tax partner at Streets Chartered Accountants, considers tax changes set to affect individuals’ finances.
As we usher in the new tax year, several significant changes are set to impact individuals’ finances.
The key changes and their impact are outlined below:
Dividend allowance slashed
The tax-free dividend allowance has been reduced from £1,000 to £500. This will affect both those who receive dividends as part of investments but also individuals who trade through a limited company preferring to take a minimal salary, plus dividends – an approach which can be more tax efficient in terms of remuneration planning, as dividends are not subject to National Insurance and taxed at a lower rate than salary.
However, National Insurance Contribution reductions, along with Corporation Tax rises and the reduction in dividend allowance have and will for some make being self-employed or paying them a salary rather than dividends more attractive. Therefore, it may be time to review your remuneration strategy.
Capital Gains Tax threshold reduced
The annual exempt allowance for capital gains tax (CGT) will be halved from £6,000 to £3,000, down from £12,300 just two years ago. Additionally, there will be a new reduced CGT rate of 24% for residential property sales for higher-rate taxpayers, down from 28%, while the basic rate remains unchanged at 18%. These changes may give rise to the need to consider the sale or acquisition of property or other business assets which might be subject to CGT.
National Insurance Contributions reductions for employees and the self employed
Employee national insurance contributions (NICs) will see a further 2% reduction to 8%, following a prior 2% cut announced in the Autumn Statement 2023. This reduction is estimated to save the average worker on £35,400 over £900 annually, resulting in a reduced tax rate of 28% for basic rate taxpayers compared to the previous 32% as of 5 January 2024.
For self-employed individuals, the main rate of Class 4 NICs is being reduced from 9% to 6%, alongside the abolition of the requirement to pay Class 2 NICs. These changes aim to simplify the tax system and save an average self-employed person on £28,000 over £650 annually.
Threshold freezes and adjustments
The basic rate and higher rate tax thresholds will remain frozen until 2028 at £12,570 and £50,271, respectively. This freeze may pull more taxpayers into higher-rate tax brackets, with over a million expected to face 40% tax charges for the first time. The additional tax 45% threshold remains unchanged at £125,140.
Additionally, the income limit for married couples’ allowance increases to £37,000 from the current £34,600.
High Income Child Benefit Charge (HICBC) Increase
The high income child benefit charge (HICBC), the threshold for which child benefit can be received, will rise to £60,000 from the current £50,000. However, the charge is tapered, meaning it may still be beneficial for parents or their partners earning between £60,000 and £80,000 to claim child benefits. The charge increases by 1% for every £200 of income exceeding £60,000 and equals the amount of the child benefit payment if income exceeds £80,000.
Child benefit rates will increase with the eldest child receiving £25.60, up from £24, and other children receiving £16.95, up from £15.90.
Pensions, making retirement better?
For private pensions, the new lump sum allowance will be £268,275, while the lump sum and death benefit allowance will be £1,073,100, with the lifetime allowance being eliminated.
The state pension will increase to £221.20 a week from £203.85 and working tax credit elements will also see adjustments.
Inheritance Tax remains frozen
The IHT threshold remains frozen at £325,000, with no increase for 15 years, perhaps not surprisingly the amount paid to HMRC in IHT is at an unprecedented level with £7.5bn said to be collected in the tax year 23/24. It might therefore be time for many to look at IHT planning in the year ahead.
These changes are all part of an ever-changing tax landscape and continue to highlight the need for individuals and businesses alike to keep up to date, as well as to ensure that they seek advice from specialist tax advisers.
See this column in the May edition of East Midlands Business Link Magazine here.
Marketing firms join forces in Chesterfield
Chesterfield-based digital and print solutions agency FWD Motion has set up a new partnership with CLM Digital Marketing, a provider of Content Writing and Search Engine Optimisation (SEO) services.
Established in 2005 by David Whiteley and Mike Priestley, FWD Motion has expanded its capabilities by joining forces with CLM Digital Marketing, further building on its commitment to delivering exceptional services to clients across various industries.
As part of this merger, Charlotte Marshall, formerly of CLM Digital Marketing, assumes the role of Director and Co-Owner of FWD Motion.
Mike Priestley said: “The decision to merge these two businesses and partner with Charlotte was an easy one and was driven by recognition that our combined strengths create a more comprehensive offering for clients, encompassing a wider range of services to meet evolving digital marketing needs.”
Charlotte Marshall said: “I look forward to leading a team dedicated to ensuring that the excellent websites created by FWD Motion perform well on search engines, with the ultimate goal always being to help our clients to grow their businesses.”
David Whiteley added: “We are thrilled to welcome Charlotte on board. Her commitment to building lasting client relationships, prioritising environmental sustainability, and cultivating the team is a perfect match with our values. She is the ideal fit to lead FWD Motion into its next twenty years of success”.
Contractor fined after young carpenter dies
A carpentry contractor has been fined after a 22-year-old man died after he was struck by construction equipment on a building site.
On 30 October 2019, Niall McCormack from Kettering, Northamptonshire had been working for KM Carpentry Contractors Limited installing roof trusses at a new build site at Alconbury Weald, Cambridgeshire.
Both the truss packs and party wall spandrel panel had been lifted by crane onto a pair of semi-detached properties the day before the incident – temporarily supported by timber restraints.
Mr McCormack was working with another carpenter to remove trusses from the pack, to then spread and install across the building. As the two carpenters were in the process of spreading, the wind caught a spandrel panel, pushing it against the remaining trusses in the pack. Both the truss pack and spandrel panel fell into the work area. Niall McCormack was struck by the falling material and suffered a fatal head injury.
An investigation by The Health and Safety Executive (HSE) found that KM Carpentry Contractors Limited had failed to identify the risk of wind loading, and the effect this could have on the stability of the spandrel panel prior to being secured in place. The method statement for the installation of the spandrel panels included lifting and placing them on the roof only after the roof trusses had been installed and permanently secured. This could not be followed as they had both been placed on the roof at the same time as the roof trusses the day before.
At Cambridge Magistrates’ Court on 25 April 2024, KM Carpentry Contractors Limited, of High Street, Higham Ferrers pleaded guilty to breaching Section 2(1) of the Health & Safety at Work etc Act.
The company was fined £8,000 and ordered to pay £6,974 in costs.
A family statement said: “The whole family has been badly affected by Niall’s loss. One of his friends is going to Australia and we can’t help thinking Niall should be here and going with him.
“Niall has lost the ability to grow up and have children of his own. He won’t be getting married and all the things you do as families. He’s missed out on so much, for what, going to work. No one should go to work and not come back.”
After the hearing, HSE Inspector Jenny Morris said: “Our thoughts are with Niall’s family, a 22-year-old who was just setting out on his career in the construction industry.
“This case highlights the importance of identifying the risks associated with a work activity and ensuring a safe system of work is devised and then followed.”
The prosecution was brought by HSE enforcement lawyer Samantha Wells and paralegal officer Lucy Gallagher.
Access to capital is top challenge for mid-sized businesses
Trying to source new capital, such as bank loans, grants and private equity, is the most significant challenge for over a quarter of the UK’s mid-sized businesses, according to the latest research from accounting and advisory firm, BDO.
BDO’s bi-monthly survey of 500 mid-sized businesses, which looks at the challenges and opportunities facing UK companies with a turnover between £10m-£300m, reveals nearly one in three (32%) have ambitions to access new finance, such as additional bank loans, government grants, private equity or venture capital, or via a listing on UK public markets in the next six months.
However, difficulties accessing finance are proving problematic and restricting growth ambitions. More than a quarter (27%) say it is one of their biggest challenges over the next six months, with a similar number (26%) now struggling to deliver on their growth plans, such as entering new markets or offering new products or services.
Manufacturers are struggling the most with challenges around accessing new capital (32%), with real estate and construction businesses following closely behind (31%).
These findings come as high borrowing costs, driven by elevated interest rates, make it more challenging for mid-sized businesses to access and service debt finance. In addition, while official data suggests inflation may be easing, higher costs across the board remain a constant battle for businesses looking to grow.
Businesses reported that high costs in the supply chain are a persistent problem. One in five (20%) are suffering from increased costs as a result of changes to trade policy and regulation, such as different tariffs or customs rules, while a similar number (18%) say costs such as fuel are too high.
Business outlook improves after technical recession
Despite difficult trading conditions, mid-sized businesses remain cautiously optimistic. Over half (53%) feel more confident about the outlook for their business for the rest of the year compared with the second half of 2023, when the UK recorded a technical recession.
Many businesses surveyed were buoyed by the prospect of lower borrowing costs, as 27% expect a positive impact from future interest rate cuts. This outstrips concern from businesses who feel less confident, with one in five (20%) saying a cut may come too late to help improve their growth prospects.
Business leaders are calling for the next government to help drive their growth in the long term. Over a third (36%) want to see the Government prioritise improving access to capital, for example by enabling smaller business banks to enter the market or through government grants.
Almost a fifth (19%) want to see less complex regulation around listing on the London Stock Exchange, with a similar number (18%) hoping to see more progress on levelling up the regions outside London and the South East.
Richard Austin, partner at BDO, said: “Access to finance is a huge contributing factor to UK economic growth. Businesses have the appetite to drive forward long-term growth plans, but the difficulties experienced in accessing the capital needed to fund that growth are proving unsurmountable for many.
“Despite remaining resilient and realistic, these businesses need more support to achieve their ambitions. The mid-market is the engine of the UK economy, providing one in four jobs and over £1 trillion in revenues.
“The issues they are highlighting should not be overlooked by policymakers as their growth will play a key role in the overall economic recovery of the UK.”
First East Midlands Combined County Authority Mayor elected
Claire Ward (Labour and Cooperative Party) has been elected as the first East Midlands Combined County Authority Mayor with 181,040 total votes.
The mayor will lead the new East Midlands Combined County Authority (EMCCA), which will have access to more than £4 billion of new investment in the region for skills, transport, housing and regeneration and net zero – with further investment likely to follow.
The vote has been hailed as an “historic moment” in the region’s future which can turn round decades of under-investment.
It also means decisions about key issues affecting the future of people, places and businesses across the East Midlands will now be taken here in the region rather than down in Westminster.
The £4 billion investment has been made possible by a landmark devolution deal which means government has handed back some of its powers to an East Midlands mayor and combined county authority.
The East Midlands Chamber reacted warmly to the appointment, with Chief Executive Scott Knowles saying: “I’d like to extend my congratulations to Claire Ward as she takes on this new role of Combined County Authority mayor. I look forward to sharing insight with Claire into the needs of businesses in Derbyshire and Nottinghamshire as this new chapter for the two counties unfolds.
“I wish Claire every success as Combined County Authority mayor and at East Midlands Chamber we stand ready to work with Claire in highlighting the key issues facing businesses in the East Midlands. While there is plenty of growth potential in Derbyshire and Nottinghamshire, the skills gap and the need for reform in areas like transport are ever present, as are the prohibitive costs of doing business.”
Nikki Paterson, CBI Regional Director for the Midlands, said: “Congratulations to Claire Ward and Richard Parker on their election as East and West Midlands Mayors respectively. After a difficult few years for people and businesses across the Midlands, there’s really no time to waste in getting the local economy firing once again.
“Delivering jobs, opportunity and prosperity has to be at the very top of the new mayors’ ‘to do’ lists. That means pressing ahead with ambitious plans to modernise the local economy and bring high growth sectors to the area.
“Advancing plans to build a Gigafactory at the Coventry Airport site and continuing to support high growth potential sectors, like tech and advanced manufacturing, would be two significant steps to achieving that goal.
“With East Midlands Hydrogen also representing the UK’s largest inland hydrogen cluster, we need to see greater collaboration between the mayors’ office and industry leaders to ensure we can fully capitalise on this incredible driver of growth.”
D2N2 LEP Chair, Elizabeth Fagan, said: “I warmly congratulate Claire on her successful election as our new East Midlands Mayor. I’m truly confident that Claire, our new mayor, will champion the voice of our hard-working, successful businesses, from micro, to SMEs, to global corporates, and ensure a strong economic and inward investment strategy for low carbon economic growth, skills, transport and housing. Our time is now.”
FIFA partnership with Loughborough University paves way for turf testing
A partnership involving Loughborough University and football’s governing body is hoped to improve the durability, safety and performance of artificial pitches.
FIFA have this week issued new testing methods and introduced new testing devices which will be used to assess artificial playing surfaces in line with the highest industry standards.
The changes are the first since 2015 – when the FIFA Test Manual for Football Turf was last updated.
Prof. Steph Forrester from the University’s Sports Technology Institute said: “With the development in artificial pitches since the standards were last updated, it was important that we assess the move in technology and implement a new foundation for testing to take place.
“More and more football is being played every week and these artificial surfaces need to be able to handle it.
“As part of the FIFA Football Turf Technical Advisory Group, we’ve worked incredibly closely with FIFA and Labosport to finalise these new tests which looks to ensure pitch quality across the globe whilst developing new, safe and sustainable innovations and technologies.”
Work at the University led the development of a new advanced artificial athlete algorithm – providing a comprehensive insight into the surface’s performance by measuring peak shock absorption, peak deformation, and energy return – and a lighter and more advanced rotational traction athlete test – providing a deeper understanding of the surface’s rotational traction characteristics.
High-tech Lincolnshire agricultural initiatives win financial backing from Government
Two high-tech agricultural businesses in Lincolnshire have been offered funding from a national £7.5 million pot to support innovation and growth.
An automated blueberry harvesting project led by Eyre Trailers in Coningsby, in partnership with the University of Lincoln, and a daffodil harvesting scheme at C Wright and Son in Gedney have each been offered around £300,000 as a share of £1.84m awarded to 12 projects across the east of England.
The money has come from the new Launchpads programme managed by Innovate UK which offers small and medium enterprises (SMEs) grants from £25,000 to £300,000 for R&D and innovation projects that focus on agrifood.
The Eastern England Launchpad is being supported by the Greater Lincolnshire Local Enterprise Partnership, the Cambridgeshire and Peterborough Combined Authority and Norfolk and Suffolk County Councils.
Ten other successful projects across the area include novel biological defences against aphids, enhancing the fibre content of food and drink products, enhancements in crop breeding, and creating new types of plant-based food packaging.
The objective of the Eyre Trailers automated blueberry harvesting project, which stands to secure £299,693, is to develop and demonstrate a fully automatic machine for harvesting blueberries, one of the UK’s most important soft fruit crops.
The proposed machine will be fully automatic and will feature new berry removal and bush gripper systems. It will be designed to remove berries from the bush by the use of innovative shaking systems and should be available for widescale deployment by UK growers next year.
Blueberries are now the second largest soft fruit sold in the UK, with the industry expanding to meet demand, but still only has a 7% share of the market.
“We’re very privileged to have been offered the grant and to be working with the University of Lincoln, and we’re looking forward to bringing the project to fruition,” said Bob Eyre from Eyre Trailers. “Without this grant it would be difficult to bring this product to market, so we’re really grateful.
“Blueberry harvesting is very labour-intensive as growers are completely reliant on hand-picking. Finding the workers to do it is difficult and expensive, so everybody is looking to reduce the labour costs and make the job more viable. Currently lots of fruit is left unpicked because the growers can’t find the labour for the harvest.
“By the end of the project we aim to be manufacturing a machine that’s fit for purpose and that satisfies the blueberry growers. It will be quite a big growth area for us and it could really rejuvenate our business.”
The daffodil harvesting project, which has been offered £299,985, is being led by Autopickr in Cambridge with Lincolnshire grower C Wright & Son as a partner.
Horticulture has traditionally offered growers high incomes from small areas of land, but the total land area used for horticulture has declined by 15% since 2020.
To combat shortages of labour and high labour costs the project will develop a multi-functional robotic platform capable of horticultural tasks that cannot be automated using simple machines like tractors or harvesters.
An asparagus harvester has already been developed and will launch in the next three years, and growers have highlighted the fact that flower production, specifically daffodils, is another promising area in which to develop robotic capabilities.
The daffodil picker will feature a sophisticated robotic arm, a platform weighing less than 45kg, and an artificial vision system to recognise picked flowers for the arm to collect and transport.
Success in this project will lower labour costs for English growers and reduce barriers to the growth of daffodil production, which is a lucrative export market for growers.
“We are very pleased to have received funding for this project,” said Adam Cunnington from C Wright & Son. “Labour is getting hard to come by and any method of automating our harvest has to be the way forward. We have every faith in the project delivering automation to a much needed harvest operation.”
83% of all website customers did this before buying…
Over the past six months, local video production company Glowfrog have been collaborating closely with White Knight Appliances to create product videos for each appliance showcased on their website, with the aim being not only to enhance SEO and drive traffic to the site, but also to increase sales conversions.
Mr Bulgacs, the director of White Knight Appliances, observed remarkable results following the implementation of these product videos.
“Having seen a significant uplift in sales after integrating the videos onto our website – indeed selling out of one particular fridge-freezer within just four days – we decided to monitor customer behaviour closely,” he explained.
“What we discovered was that a staggering 83% of all purchases were made by people who had viewed the corresponding product video. Combine this with the fact that sales increased so rapidly and I can only conclude that these product videos have been even more powerful than I’d hoped.”
This revelation underscores the profound impact that video marketing can have on consumer behaviour and purchasing decisions. Matt, director at Glowfrog, said: “We are delighted to see such tangible results for our client. This is yet another example of how video marketing can really help businesses to boost sales and enhance brand visibility.”
If you’re looking to increase sales on your website, Glowfrog Video Production can help you by producing outstanding and effective product videos.
Website: www.glowfrogvideo.com
Phone: 01332 492 465
Email: hello@glowfrogvideo.com
High street records fifth month of negative in-store sales
In-store sales fell by -1.7% in April, which is the fifth consecutive month of negative results, according to new data from BDO’s High Street Sales Tracker.
BDO’s data, which records sales across discretionary spend categories, highlighted that while overall sales, combining both online and in-store, remained flat at +0.4% in April, it was the performance of high street stores which brought the overall figure down.
This drop is primarily due to a significant fall in sales in the fashion sector, with in-stores sales down -8.3% compared to April 2023.
The fashion sector’s poor performance means that it has now recorded eight consecutive months of negative in-store sales.
The homewares sector also saw a negative in-store result, with sales down -1.5%. However, online sales provided a small boost, increasing +8.2% in April, bringing the homewares overall total to +1.8% year on year.
The lifestyle sector was the only category to record positive in-store and non-store sales figures last month, also recording +1.8% increase compared to 2023. In-store sales grew by +3.4% whilst non-store increased by +5.8%.
Sophie Michael, head of Retail and Wholesale at BDO, said: “This is yet another disappointing set of results for the retail sector. While an increase in online sales may offer a glimmer of hope, it’s clear that consumers are simply not spending their spare cash on the high street.
“The fashion sector will be particularly concerned by such a poor sales performance in the run up to summer. Unpredictable and unseasonably cold weather may have dampened the mood of shoppers who would usually be investing in their spring and summer wardrobe.”
Sophie continued: “The competition for the consumer purse has never been fiercer. With us recording a seventh consecutive month of negative or <1% growth for discretionary spend categories, retailers should be realistic in thinking this may not be a temporary trend.
“Those who want to succeed must acknowledge that the competition is not just with other retailers but with the hospitality, leisure and travel sectors, with many choosing ‘experiences’ over products. If sales continue to fall, it may mean we see more consolidation in the sector, more empty stores, and a real risk to a crucial part of the UK economy.”
MEC’s acoustic team bolstered with new associate
A new associate has been appointed at Midlands technical consultancy, MEC Consulting Group, enabling the firm’s Acoustic team to expand its services.
Martin Hamer joins MEC as associate acoustic consultant, bringing with him over two decades of experience, including most recently as a director of a specialist acoustic consultancy employing ten staff.
A full corporate member of the Institute of Acoustics (IOA), Martin has worked on hospitality, healthcare, education, commercial and residential developments across the UK. His appointment means MEC can now offer building acoustic design and compliance testing for developers, housebuilders and architects, complementing existing environmental-based services.
“I was attracted to the role with MEC because of their strong reputation in residential development and felt this aligned well with my skillset,” said Martin. “After conversations with Alex it became clear the company has entered an exciting new phase and there would be opportunities to support the growth of the acoustics side of the business.
“Part of my role is to manage and mentor our teams in Leicester and Birmingham, which have a wealth of talent, as well as bring in new professionals as our work increases. With the Midlands’ property sector especially active, I’m confident our building acoustic design service will positively support new build sites and conversion projects across the region,” adds Martin.
MEC’s Managing Director, Alex Bennett concludes: “Acoustics are a critical part of any development planning and early engagement with a specialist can significantly help streamline a project.
“As demand for our work in this field has increased, the timing was right to recruit an experienced professional who could not only immediately add value for our clients but could also act as a mentor for the next generation. Martin’s credentials made him the standout candidate and we’re delighted to welcome him to the team.”
