DOES MAKING TAX DIGITAL AFFECT LANDLORDS: 2024 TAX CHANGES
Tom Condon
November 23rd, 2021
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In April 2022, the UK launched the first phase of Making Tax Digital (MTD), which is the government’s initiative to move small businesses, landlords and self-employed individuals into the digital age for handling their tax records.
Making Tax Digital is the government and HMRC’s strategy to fully digitalise the UK tax system. Until now, businesses, self-employed individuals and landlords have been using HMRC’s online services or manually handling their tax returns on paper.
However, with Making Tax Digital, they will soon be required to maintain their tax records and submit them to HMRC digitally, utilising MTD-compatible software.
The HMRC is actively working towards the digitisation of the tax system through the phased implementation of Making Tax Digital (MTD). The initiative is being rolled out gradually, with Making Tax Digital for Income Tax Self Assessment, MTD for ITSA, set to take effect in April 2026.
If you are a landlord or an individual engaged in Self Assessment with an annual income exceeding £50,000 from rental properties, or self-assessment, the transition to Making Tax Digital landlords is imminent.
What is Making Tax Digital?
Making Tax Digital encompassess a series of steps by HMRC, with Making Tax Digital for VAT already in force for VAT-registered businesses. The introduction of Making Tax Digital for Income Tax is scheduled for April 2026, while MTD for Corporation Tax is anticipated to come into effect in 2026. General partnerships and LLPs will follow suit later.
Making Tax Digital isn’t a new tax, it’s just the HMRC’s plan to digitalise the tax record process, so all tax is in one place.
What is Making Tax Digital for Income Tax Property?
Making Tax Digital for Income Tax Property (MTD for IT Property) represents a shift from the existing annual Self Assessment tax return process.
Specifically designed for landlords and self-employed individuals whose combined business or property income exceeds £50,000 annually, MTD for Income Tax Property is set to revolutionise the way tax obligations are fulfilled.
What is Making Tax Digital for VAT Registered Businesses?
MTD for VAT or Making Tax Digital for VAT registered businesses means that as a landlord, you will need to use functional and compatible software to maintain digital business records specifically for VAT.
The aim of Making Tax Digital is to streamline the process of managing financial records, ensuring accuracy in tax payments for individuals and businesses alike. By utilising record-keeping software, landlords can easily keep track of receipts for expenses.
Making Tax Digital also offers the flexibility to request a tax forecast from HMRC at any time, preventing surprises at the end of the financial year. Furthermore, the system allows for real-time updates on significant purchases and relief claims, enabling individuals to adjust their MTD submissions and obtain an updated tax forecast promptly.
Embracing Making Tax Digital promises not just compliance but also enhanced financial management for more transparent and efficient tax reporting experience.
Do landlords have to Make Tax Digital?
Landlords have to MTD if their taxable income from either property or business and property exceeds £30,000 annually. Make Take Digital applies to various property types, including; residential property, furnished holiday lettings, commercial property and non-UK overseas property.
If your income sits under the £30,000 threshold, you will need to use the Self Assessment system as usual, until the HMRC announces when you can join the MTD initiative.
If your income exceeds £30,000 but sits below £50,000, you will need to use MTD software to keep records and submit tax returns to HMRC by April 2027.
If your income exceeds £50,000, you will need to legally start reporting your tax returns to the HMRC from April 2026.
Across the UK, there are some landlords who have already started piloting the Make Tax Digital initiative for Income Tax Self Assessment. These pilots are being used to develop the new process, and was announced as part of the Autumn Statement.
As a landlord, if you sign up, you will be able to send Income Tax updates to HMRC instead of sending a Self Assessment tax return.
What is the landlord tax return process?
The landlord tax return process involves several key steps:
1# Register for self assessment
Landlords must register for Self Assessment and if they are not already registered, the deadline is usually 5th October in the tax year following the start of receiving rental income. Upon registration, the HMRC gateway user ID and password are provided for setting up a personal tax account to manage taxes online.
2# Stay on top of deadlines
Deadlines for submitting tax returns are usually 31st October for paper returns and 31st January for online returns. The deadline for paying tax owed aligns with the final date for online Self Assessment tax returns, with penalties for missing the set deadlines.
3# Gather the right information
To complete the tax return, landlords need details about income and expenses throughout the tax year. Maintaining records of property-related transactions, including lease agreements, rent receipts and invoices is vital.
There are some free and subscription based software’s out there which can be used for efficient record-keeping.
5# Work out allowable expenses
Landlords can deduct allowable expenses to calculate taxable profit. Expenses must be ‘wholly and exclusively’ for property rental purposes, like property repair costs, agent fees, insurance and running costs.
6# Fill in the landlord tax return
Online tax return forms are tailored based on the type of income received; UK landlords fill in the UK property section, specifying details such as rental income, income from furnished rooms and income from furnished holiday lettings.
7# Pay your landlord tax
HMRC will then calculate the amount owed and issue a tax bill. There are various payment methods available, including online banking, Chaps, debit or corporate credit cards, and bank payments. Payment on account, an advance payment toward the next Self Assessment bill, may be required for bills over £1,000.
The HMRC’s Time to Pay service can be used to set up a payment plan for bills less than £30,000 if there is difficulty in immediate payment. You should pay the bill promptly to avoid penalties, and interest for delayed payments.
There are plenty of Making Tax Digital software for landlords out there, with some offering limited filing platforms to others providing you with full MTD for landlords and company wide accountancy offerings.
Below we have listed the highest rated on TrustPilot:
Quickfile
TrustPilot review: 4.8 out of 5
Quickfile is a dedicated accounting software for private landlords with one or more UK based rental properties. They aim to provide you with all the tools you need to manage your tenants, recurring rent demands, expenses and Tax filings. With Quickfile, you can have:
- Easy tenant management: You will be able to add tenants, assign them to your rental properties, generate recurring demand, track deposit received, tenancy periods and payment reconciliations.
- Digital recordkeeping: You will be able to start digitising your accounting records ready for the rollout of MTD for ITSA. Assign expenses to specific properties and monitor your profitability.
- Making Tax Digital landlords ready: You will be able to obtain a near real time view of your tax position. Quickfile is ready for MTD and will allow you to file all your Tax Information from one platform.
Quickfile has two packages depending on the amount of ledgers you have:
- Up to 1000 ledger entries: It’s free and allows you to have access to professional invoicing, full branded client areas purchase and receipt management, banking automation, MTD compatible VAT returns, Estimates, full multi-currency support and reporting.
- 1000+ ledger entries: £60+VAT per month which includes everything included in the more basic package. With the addition of over 400 integrations, advanced customisation, segmented profit and loss, custom trading styles, invoice revision history, sent email log, enhanced bulk invoice entry, keyboard shortcuts, custom client email templates and VAT Bridging – MTD ITSA ready.
FreeAgent
TrustPilot reviews: 4.6 out of 5 stars
FreeAgent’s Making Tax Digital software for landlords is an adaptation of their original award-winning accounting software that allows you to manage your property finances from one platform. With FreeAgent you will be able to:
- Manage your property finances: Record your property income and costs in an easy and intuitive way, and view the profitability of each property.
- Have an automated admin for rental income: You will have a built-in functionality that can automate the process of recording your rental income.
- File your Self Assessment to HMRC: You can submit your tax return directly to HMRC from FreeAgent for landlords.
What about FreeAgents packages?
All of FreeAgent’s packages include a dashboard, business insights with Radar, mobile app access, estimates, invoicing, expenses, smart capture, projects, time tracking, banking, UK-based support and VAT filing. Their packages are as follows:
- For a limited company: £29 per month which includes a payroll, self assessment and end of year filing system.
- For a Partnership or LLP: £24 per month which includes a payroll system.
- For a sole trader: £19 per month which includes a payroll and self assessment system.
- For landlords: £10 per month which includes a record of your property income and finances, as well as a real time view of your self assessment.
FreeAgent also offers a free MTD software for landlords and all other packages, which can be accessed if you have a current business account with RBS, NatWest or Ulster Bank, for as long as you retain the account.
Provestor
TrustPilot review: 3.4 out of 5.
Provestor is a cloud accountancy service that holds all your records digitally and means you will be MTD-ready when it rolls around. Using Provestor you can:
- Invoice: You will be able to generate and store your rent invoices, which follow the HMRC’s best practices.
- Expenses: You will be able to record and group personal and property expenses (including mileage).
- Digital bookkeeping: You will be able to maintain accurate records with their fast and simple to use bookkeeping features.
- Receipt storage: You will be able to store receipts alongside your expenses and bookkeeping transactions.
Provestor has three different packages:
- Personal advisor: £49.17 per month which includes your personal tax return, a named account manager, access to the online accounting app and four tax consultations per year.
- Company advisor: £74.17 per month which includes your companies tax returns, a named account manager, access to the online account app and four tax consultations per year.
- Growth advisor: £127.17 per month which includes all tax returns, a named accountant, access to the online accounting app, unlimited tax consultations and annual tax reviews.
Due to Making Tax Digital for landlords being a legal requirement and significant shift in the tax system has caught many landlords off guard. Under the new laws, landlords are obligated to provide HMRC with an in depth summary of their business income and expenses every quarter using compatible software.
The deadlines for quarterly submissions for all individuals to Making Tax Digital for Income Tax rules. Landlords with a combined property and/or business income exceeding £30,000 annually must adhere to these regulations starting from April 2027.
According to these guidelines, HMRC necessitates the use of software to maintain digital records of property and/or business income and expenses. Quarterly updates, along with an end-of-period statement (EPOS) and a final declaration, must be submitted to HMRC.
Here’s the step-by-step process for landlords under Making Tax Digital:
Keeping Digital Records:
Starting April 2026, affected landlords must employ compatible software to maintain a digital record of all property income and expenses. For landlords who are also self-employed business owners, separate digital records for business income and expenses are a legal requirement.
Sending quarterly updates:
Quarterly summaries of business income and expenses need to be submitted to HMRC every three months using compatible software. The deadlines for these updates are uniform for all those following Making Tax Digital for Income Tax rules, falling on the 5th of August, November, February and May each year starting from April 6th, 2026.
Finalising your income:
At the conclusion of the tax year, landlords affected by Making Tax Digital for Income Tax must finalise their property and/or business income. This involves submitting an end-of-period statement (EOPS) for each income source and a final declaration, which replaces the annual Self Assessment for tax return.
These submissions, due by 31st January of the following tax year, serve to confirm the accuracy of the previously submitted updates throughout the tax year. Additionally, landlords can include details about personal income or tax reliefs received during the tax year and make any necessary adjustments.
Payment of the owed tax for each tax year is also required on this date. Embracing this process ensures compliance with Making Tax Digital landlord regulations and provides an avenue for transparent and accurate financial reporting.
Landlords can employ several strategies to reduce tax bills in the UK, like:
You can transfer the beneficial interest in the property to a spouse to take advantage of their tax-free allowance and lower tax bracket. Sharing beneficial interest can be done through methods like transfer of equity, deed of assignment or severing joint tenancy.
You could transfer the Buy to let property into a limited company to offset mortgage repayments from rental income against corporation tax. After paying Corporation tax, profits can be distributed as dividends which may attract lower tax rates compared to rental income.
But you should be aware of Stamp Duty Land Tax and Capital Gains Tax implications associated with this transfer.
You should consider transferring a property from a partnership to a limited company to potentially avoid paying Stamp Duty Land Tax. We would recommend seeking advice from one of our team before making such transfers.
You could deduct allowable expenses, such as mortgage interest, property repairs, rates and managing agent fees, to reduce taxable rental income. You should refer to the HMRC’s list of allowable expenses for guidance.
If there are losses in a particular tax year (e.g. due to property vacancies or significant repair costs), carry over these losses to offset profits in subsequent years.
You should also understand the income tax bands for rental income, which range from the tax-free allowance to higher rates for higher income levels.
There will be a decrease in the Capital Gains Tax exemption from £12,300 to £6,150 in 2023, with a further decrease to £3,000 in April 2024. Alongside this, there will be an implementation of full capital expensing for three years, replacing the super deduction – corporation tax is still set to rise to 25% from 19%.
In order to extend the growth market exemption, stamp duty and stamp duty reserve tax are going to include innovative growth markets in January 2024 until 2025. For homeowners. Stamp duty land tax will need to be paid above £250,000, but will fall back below £125,000 in 2025.
What changes were announced in the Autumn Budget 2024?
Announced by Jeremy Hunt in the Autumn budget statement 2023, there were several large tax changes being introduced in 2024 and beyond. These included tax cuts for employees and the self-employed:
- The government plans to cut the main rate of Class 1 employee National Insurance contributions (NICs) from 12% to 10% starting from January 6th 2024.
- The main rate of Class 4 Self-employed NICs will be reduced from 9% to 8% from April 6th 2024.
- The Class 2 Self-employed and landlord NICs will be abolished – simplifying the process.
These tax cuts are expected to benefit over 29 million working people, with the average worker on £35,400 receiving a tax cut of over £450 in 2024-25. Approximately 2 million self-employed individuals are expected to save £350 in 2024-25.
Furthermore, the Autumn Statement also set out a reduction in the dividend tax threshold from £2,000 to £1,000, further decreasing to £500 from April 2024.
The UK Government also made a commitment to a pension triple lock, which will provide an extra £900 per person annually from April 2024. This comes alongside an abolishment of the lifetime allowance for pensions and increases the annual allowance from £40,000 to £60,000.
Start your property portfolio today!
In April 2022, the UK launched the first phase of Making Tax Digital (MTD), which is the government’s initiative to move small businesses, landlords and self-employed individuals into the digital age for handling their tax records.
Making Tax Digital is the government and HMRC’s strategy to fully digitalise the UK tax system. Until now, businesses, self-employed individuals and landlords have been using HMRC’s online services or manually handling their tax returns on paper.
However, with Making Tax Digital, they will soon be required to maintain their tax records and submit them to HMRC digitally, utilising MTD-compatible software.
The HMRC is actively working towards the digitisation of the tax system through the phased implementation of Making Tax Digital (MTD). The initiative is being rolled out gradually, with Making Tax Digital for Income Tax Self Assessment, MTD for ITSA, set to take effect in April 2026.
If you are a landlord or an individual engaged in Self Assessment with an annual income exceeding £50,000 from rental properties, or self-assessment, the transition to Making Tax Digital landlords is imminent.
What is Making Tax Digital?
Making Tax Digital encompassess a series of steps by HMRC, with Making Tax Digital for VAT already in force for VAT-registered businesses. The introduction of Making Tax Digital for Income Tax is scheduled for April 2026, while MTD for Corporation Tax is anticipated to come into effect in 2026. General partnerships and LLPs will follow suit later.
Making Tax Digital isn’t a new tax, it’s just the HMRC’s plan to digitalise the tax record process, so all tax is in one place.
What is Making Tax Digital for Income Tax Property?
Making Tax Digital for Income Tax Property (MTD for IT Property) represents a shift from the existing annual Self Assessment tax return process.
Specifically designed for landlords and self-employed individuals whose combined business or property income exceeds £50,000 annually, MTD for Income Tax Property is set to revolutionise the way tax obligations are fulfilled.
What is Making Tax Digital for VAT Registered Businesses?
MTD for VAT or Making Tax Digital for VAT registered businesses means that as a landlord, you will need to use functional and compatible software to maintain digital business records specifically for VAT.
The aim of Making Tax Digital is to streamline the process of managing financial records, ensuring accuracy in tax payments for individuals and businesses alike. By utilising record-keeping software, landlords can easily keep track of receipts for expenses.
Making Tax Digital also offers the flexibility to request a tax forecast from HMRC at any time, preventing surprises at the end of the financial year. Furthermore, the system allows for real-time updates on significant purchases and relief claims, enabling individuals to adjust their MTD submissions and obtain an updated tax forecast promptly.
Embracing Making Tax Digital promises not just compliance but also enhanced financial management for more transparent and efficient tax reporting experience.
Do landlords have to Make Tax Digital?
Landlords have to MTD if their taxable income from either property or business and property exceeds £30,000 annually. Make Take Digital applies to various property types, including; residential property, furnished holiday lettings, commercial property and non-UK overseas property.
If your income sits under the £30,000 threshold, you will need to use the Self Assessment system as usual, until the HMRC announces when you can join the MTD initiative.
If your income exceeds £30,000 but sits below £50,000, you will need to use MTD software to keep records and submit tax returns to HMRC by April 2027.
If your income exceeds £50,000, you will need to legally start reporting your tax returns to the HMRC from April 2026.
Across the UK, there are some landlords who have already started piloting the Make Tax Digital initiative for Income Tax Self Assessment. These pilots are being used to develop the new process, and was announced as part of the Autumn Statement.
As a landlord, if you sign up, you will be able to send Income Tax updates to HMRC instead of sending a Self Assessment tax return.
What is the landlord tax return process?
The landlord tax return process involves several key steps:
1# Register for self assessment
Landlords must register for Self Assessment and if they are not already registered, the deadline is usually 5th October in the tax year following the start of receiving rental income. Upon registration, the HMRC gateway user ID and password are provided for setting up a personal tax account to manage taxes online.
2# Stay on top of deadlines
Deadlines for submitting tax returns are usually 31st October for paper returns and 31st January for online returns. The deadline for paying tax owed aligns with the final date for online Self Assessment tax returns, with penalties for missing the set deadlines.
3# Gather the right information
To complete the tax return, landlords need details about income and expenses throughout the tax year. Maintaining records of property-related transactions, including lease agreements, rent receipts and invoices is vital.
There are some free and subscription based software’s out there which can be used for efficient record-keeping.
5# Work out allowable expenses
Landlords can deduct allowable expenses to calculate taxable profit. Expenses must be ‘wholly and exclusively’ for property rental purposes, like property repair costs, agent fees, insurance and running costs.
6# Fill in the landlord tax return
Online tax return forms are tailored based on the type of income received; UK landlords fill in the UK property section, specifying details such as rental income, income from furnished rooms and income from furnished holiday lettings.
7# Pay your landlord tax
HMRC will then calculate the amount owed and issue a tax bill. There are various payment methods available, including online banking, Chaps, debit or corporate credit cards, and bank payments. Payment on account, an advance payment toward the next Self Assessment bill, may be required for bills over £1,000.
The HMRC’s Time to Pay service can be used to set up a payment plan for bills less than £30,000 if there is difficulty in immediate payment. You should pay the bill promptly to avoid penalties, and interest for delayed payments.
There are plenty of Making Tax Digital software for landlords out there, with some offering limited filing platforms to others providing you with full MTD for landlords and company wide accountancy offerings.
Below we have listed the highest rated on TrustPilot:
Quickfile
TrustPilot review: 4.8 out of 5
Quickfile is a dedicated accounting software for private landlords with one or more UK based rental properties. They aim to provide you with all the tools you need to manage your tenants, recurring rent demands, expenses and Tax filings. With Quickfile, you can have:
- Easy tenant management: You will be able to add tenants, assign them to your rental properties, generate recurring demand, track deposit received, tenancy periods and payment reconciliations.
- Digital recordkeeping: You will be able to start digitising your accounting records ready for the rollout of MTD for ITSA. Assign expenses to specific properties and monitor your profitability.
- Making Tax Digital landlords ready: You will be able to obtain a near real time view of your tax position. Quickfile is ready for MTD and will allow you to file all your Tax Information from one platform.
Quickfile has two packages depending on the amount of ledgers you have:
- Up to 1000 ledger entries: It’s free and allows you to have access to professional invoicing, full branded client areas purchase and receipt management, banking automation, MTD compatible VAT returns, Estimates, full multi-currency support and reporting.
- 1000+ ledger entries: £60+VAT per month which includes everything included in the more basic package. With the addition of over 400 integrations, advanced customisation, segmented profit and loss, custom trading styles, invoice revision history, sent email log, enhanced bulk invoice entry, keyboard shortcuts, custom client email templates and VAT Bridging – MTD ITSA ready.
FreeAgent
TrustPilot reviews: 4.6 out of 5 stars
FreeAgent’s Making Tax Digital software for landlords is an adaptation of their original award-winning accounting software that allows you to manage your property finances from one platform. With FreeAgent you will be able to:
- Manage your property finances: Record your property income and costs in an easy and intuitive way, and view the profitability of each property.
- Have an automated admin for rental income: You will have a built-in functionality that can automate the process of recording your rental income.
- File your Self Assessment to HMRC: You can submit your tax return directly to HMRC from FreeAgent for landlords.
What about FreeAgents packages?
All of FreeAgent’s packages include a dashboard, business insights with Radar, mobile app access, estimates, invoicing, expenses, smart capture, projects, time tracking, banking, UK-based support and VAT filing. Their packages are as follows:
- For a limited company: £29 per month which includes a payroll, self assessment and end of year filing system.
- For a Partnership or LLP: £24 per month which includes a payroll system.
- For a sole trader: £19 per month which includes a payroll and self assessment system.
- For landlords: £10 per month which includes a record of your property income and finances, as well as a real time view of your self assessment.
FreeAgent also offers a free MTD software for landlords and all other packages, which can be accessed if you have a current business account with RBS, NatWest or Ulster Bank, for as long as you retain the account.
Provestor
TrustPilot review: 3.4 out of 5.
Provestor is a cloud accountancy service that holds all your records digitally and means you will be MTD-ready when it rolls around. Using Provestor you can:
- Invoice: You will be able to generate and store your rent invoices, which follow the HMRC’s best practices.
- Expenses: You will be able to record and group personal and property expenses (including mileage).
- Digital bookkeeping: You will be able to maintain accurate records with their fast and simple to use bookkeeping features.
- Receipt storage: You will be able to store receipts alongside your expenses and bookkeeping transactions.
Provestor has three different packages:
- Personal advisor: £49.17 per month which includes your personal tax return, a named account manager, access to the online accounting app and four tax consultations per year.
- Company advisor: £74.17 per month which includes your companies tax returns, a named account manager, access to the online account app and four tax consultations per year.
- Growth advisor: £127.17 per month which includes all tax returns, a named accountant, access to the online accounting app, unlimited tax consultations and annual tax reviews.
Due to Making Tax Digital for landlords being a legal requirement and significant shift in the tax system has caught many landlords off guard. Under the new laws, landlords are obligated to provide HMRC with an in depth summary of their business income and expenses every quarter using compatible software.
The deadlines for quarterly submissions for all individuals to Making Tax Digital for Income Tax rules. Landlords with a combined property and/or business income exceeding £30,000 annually must adhere to these regulations starting from April 2027.
According to these guidelines, HMRC necessitates the use of software to maintain digital records of property and/or business income and expenses. Quarterly updates, along with an end-of-period statement (EPOS) and a final declaration, must be submitted to HMRC.
Here’s the step-by-step process for landlords under Making Tax Digital:
Keeping Digital Records:
Starting April 2026, affected landlords must employ compatible software to maintain a digital record of all property income and expenses. For landlords who are also self-employed business owners, separate digital records for business income and expenses are a legal requirement.
Sending quarterly updates:
Quarterly summaries of business income and expenses need to be submitted to HMRC every three months using compatible software. The deadlines for these updates are uniform for all those following Making Tax Digital for Income Tax rules, falling on the 5th of August, November, February and May each year starting from April 6th, 2026.
Finalising your income:
At the conclusion of the tax year, landlords affected by Making Tax Digital for Income Tax must finalise their property and/or business income. This involves submitting an end-of-period statement (EOPS) for each income source and a final declaration, which replaces the annual Self Assessment for tax return.
These submissions, due by 31st January of the following tax year, serve to confirm the accuracy of the previously submitted updates throughout the tax year. Additionally, landlords can include details about personal income or tax reliefs received during the tax year and make any necessary adjustments.
Payment of the owed tax for each tax year is also required on this date. Embracing this process ensures compliance with Making Tax Digital landlord regulations and provides an avenue for transparent and accurate financial reporting.
Landlords can employ several strategies to reduce tax bills in the UK, like:
You can transfer the beneficial interest in the property to a spouse to take advantage of their tax-free allowance and lower tax bracket. Sharing beneficial interest can be done through methods like transfer of equity, deed of assignment or severing joint tenancy.
You could transfer the Buy to let property into a limited company to offset mortgage repayments from rental income against corporation tax. After paying Corporation tax, profits can be distributed as dividends which may attract lower tax rates compared to rental income.
But you should be aware of Stamp Duty Land Tax and Capital Gains Tax implications associated with this transfer.
You should consider transferring a property from a partnership to a limited company to potentially avoid paying Stamp Duty Land Tax. We would recommend seeking advice from one of our team before making such transfers.
You could deduct allowable expenses, such as mortgage interest, property repairs, rates and managing agent fees, to reduce taxable rental income. You should refer to the HMRC’s list of allowable expenses for guidance.
If there are losses in a particular tax year (e.g. due to property vacancies or significant repair costs), carry over these losses to offset profits in subsequent years.
You should also understand the income tax bands for rental income, which range from the tax-free allowance to higher rates for higher income levels.
There will be a decrease in the Capital Gains Tax exemption from £12,300 to £6,150 in 2023, with a further decrease to £3,000 in April 2024. Alongside this, there will be an implementation of full capital expensing for three years, replacing the super deduction – corporation tax is still set to rise to 25% from 19%.
In order to extend the growth market exemption, stamp duty and stamp duty reserve tax are going to include innovative growth markets in January 2024 until 2025. For homeowners. Stamp duty land tax will need to be paid above £250,000, but will fall back below £125,000 in 2025.
What changes were announced in the Autumn Budget 2024?
Announced by Jeremy Hunt in the Autumn budget statement 2023, there were several large tax changes being introduced in 2024 and beyond. These included tax cuts for employees and the self-employed:
- The government plans to cut the main rate of Class 1 employee National Insurance contributions (NICs) from 12% to 10% starting from January 6th 2024.
- The main rate of Class 4 Self-employed NICs will be reduced from 9% to 8% from April 6th 2024.
- The Class 2 Self-employed and landlord NICs will be abolished – simplifying the process.
These tax cuts are expected to benefit over 29 million working people, with the average worker on £35,400 receiving a tax cut of over £450 in 2024-25. Approximately 2 million self-employed individuals are expected to save £350 in 2024-25.
Furthermore, the Autumn Statement also set out a reduction in the dividend tax threshold from £2,000 to £1,000, further decreasing to £500 from April 2024.
The UK Government also made a commitment to a pension triple lock, which will provide an extra £900 per person annually from April 2024. This comes alongside an abolishment of the lifetime allowance for pensions and increases the annual allowance from £40,000 to £60,000.
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