In a move to ease financial burdens on UK households, the Government has implemented a historic National Insurance (NI) cut, providing relief for 27 million taxpayers. As of Saturday, 6 January 2024, the main rate of National Insurance has been reduced by 2%, dropping from 12% to 10%. This reduction, exceeding 15%, equates to a £450 saving this year for the average salaried worker earning £35,400. For a household with two average earners, the annual savings could be worth nearly £1,000, marking a positive impact on the disposable income of families nationwide.
HMRC has launched an online tool to assist individuals in understanding the implications of the tax cut. This tool, hosted on the Government’s cost of living support website on GOV.UK, uses salary information to provide personalised estimates of potential National Insurance savings for employees.
In addition to this historic tax cut, further measures will apply later this year, including a National Insurance cut for
2m self-employed individuals, set totake effect on 6th April 2024. This move, worth £350 for the average self-employed person on £28,200, is part of the Government’s commitment to supporting businesses and households alike.
Chancellor Jeremy Hunt, said:“With inflation halved, we’ve turned a corner and are cutting taxes - starting with today’s record cut to National Insurance worth nearly £1,000 for a household.“From nurses and brickies, to cleaners and butchers, 27 million hard-working Brits will have a little more cash in their pockets.”
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ECONOMIC CONFIDENCE INDEX DECLINES
Business leader confidence in the UK economy fell to -28 in December 2023 after hitting -21 in November, according to the latest economic confidence index from the Institute of Directors (IoD).The decline is in contrast to business leaders’ confidence in their own enterprises, which surged to +36 in December – a notable uptick from the +30 recorded in November.Positive trajectories were also observed in revenue and export expectations for December. The net outlook for revenue in the next 12 months, compared to the last year, climbed from +37 in November to +42 in December.Similarly, export prospects exhibited an upward trajectory, escalating from +15 to +20 in the final month of the year.
HMRC ENFORCES TIGHTER RULES ON ‘SIDE HUSTLE TAX’
In a bid to tighten tax regulations and combat tax evasion, HMRC is implementing measures affecting sellers on platforms such as eBay, Vinted, Airbnb and Etsy. Effective from 1 January, many digital platforms are now mandated to collect under new international rules adopted by the UK through the Organisation for Economic Cooperation and Development (OECD).The reporting obligation applies not only to the sale of goods, such as second- hand clothes and handmade items, but also encompasses services like taxi hire, food delivery and short-term accommodation letting.
UKEF INTRODUCES ENHANCED FINANCING FOR SMALL BUSINESSES
In a move to boost internationaltrade and foster greater exporting opportunities for small businesses, UK Export Finance (UKEF) has introduced more flexible and expedited financing.The Government’s export credit agency made this announcement during its annual conference, revealing it now has the capability to fast-track trade finance applications worth up to £10 million – double the previous limit.This initiative aligns with the Government’s commitment in the 2023 Autumn Statement to provide additional support for SMEs seeking to access global markets through UKEF.The measures introduced will also widen the maximum timeframe for loans from the General Export Facility from two to five years. This aims to give businessesmore adaptable repayment terms amidst the current challenging economic landscape.By expanding the ‘auto-inclusion’ scheme, small businesses can now swiftly secure Government-backed credit without manual intervention from UKEF.
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If you’ve found the topics covered in this report to be of interest or would like to delve deeper into any of them, we welcome the opportunity to engage in a more detailed discussion with you. ADPL team of experts is always keen to share insights, and we’re confident that a conversation with us can provide valuable perspective.If you’re considering getting extra support, ADPL invite you to explore the comprehensive solutions we offer. To schedule a meeting or to get more information, please don’t hesitate to contact
Talk to ADPL about your personal tax liabilities.
www.accountingdirectplus.com
293 Green Lanes,LondonN13 4XS
t: 020 8886 9222