However, a number of changes will be made to allow multiple subscriptions to ISAs of the same type every year and to allow partial transfers of ISA funds in-year between providers from April 2024. Pension tax limits A number of changes were made to the tax regime for pensions for 2023/24 and these include the following, which will remain at their 2023/24 levels for 2024/25: • The Annual Allowance (AA) is £60,000. • Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000. • No Lifetime Allowance (LA) charge. In addition, as previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes will be made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements.
The government will set out the next steps on Class 2 reform next year. Comment This will mean that a self-employed person who currently pays Class 2 NICs will save at least £192 per year. Secondly, the government will cut the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024. Comment This will benefit around two million individuals, recognising the contribution of the self-employed to the economy and ensuring that work pays for all. Extension of NICs relief for hiring veterans The government is extending the employer NICs relief for businesses hiring qualifying veterans for a further year from April 2024 until April 2025. This means that employers will continue to pay no employer NICs up to annual earnings of £50,270 for the first year of a qualifying veteran’s employment in a civilian role. National Living Wage and National Minimum Wage The government has accepted in full the recommendations of the Low Pay Commission and announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from April 2024. In addition, from April 2024 the NLW will be extended to 21 and 22 year olds. The rates which will apply from 1 April 2024 are as follows:
Backing British business To increase business investment, the government has announced a number of measures which could raise around £20 billion per year from businesses in a decade’s time. The changes include: • Full Expensing will be made permanent. • The removal of barriers to critical infrastructure by reforming the UK’s inefficient planning system and speeding up electricity grid connection times. • A package of pension reform and driving private investment from insurers into infrastructure by legislating for key reforms to Solvency II. • Making £4.5 billion available in strategic manufacturing sectors such as auto, aerospace, life sciences and clean energy from 2025 for five years. • New Investment Zones. • From April 2024, firms bidding for government contracts over £5 million will have to demonstrate that they pay their own invoices within an average of 55 days, tightening to 45 days in
Age
NLW 18-20 16-17 Apprentices
From 1 April 2024
£11.44
£8.60 £6.40
£6.40
The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over. Comment The Department for Business and Trade estimates 2.7 million workers will directly benefit from the 2024 National Living Wage increase. Individual Savings Accounts The government is freezing the limits on Individual Savings Accounts (ISAs) (£20,000), Junior Individual Savings Accounts (£9,000), Lifetime Individual Savings Accounts (£4,000 excluding government bonus) and Child Trust Funds (£9,000) for 2024/25.
April 2025 and then 30 days in future years. • Changes to Research and Development.
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