2024 Tax Year Changes Summarized Factsheet
June 4, 2024
National Insurance contribution rate cuts
National Insurance contributions (NICs) will be reduced by 2%:
- Employees’ contributions will decrease from 10% to 8%.
- Self-employed individuals’ contributions will drop from 8% to 6%.
Additionally, self-employed individuals won’t have to pay Class 2 NICs. However, they can still choose to pay them voluntarily under certain circumstances to maintain access to contributory benefits.
High-Income Child Benefit Change
The threshold for the High-Income Child Benefit Charge has increased from £50,000 to £60,000. Also, the highest income limit before the charge kicks in will increase from £60,000 to £80,000.
Minimum wage increases
The Minimum Wage and Living Wage has their biggest increases ever. Additionally, the age requirement for qualifying for the National Living Wage will drop from 23 to 21.
Here are the new rates:
- For people 21 and over: £11.44
- For those aged 18 to 20: £8.60
- Under 18: £6.40
- Apprentices: £6.40
Scotland tax band change
A new Advanced income tax band is added for annual income between £75,000 and £125,140. An additional 1% will be added to the Top rate of tax meaning income over £125,140 will be taxed at 48%.
| Income Range | Income Tax Rate |
|---|---|
| £12,571 – £14,8761 | Starter rate: 19% |
| £14,877 – £26,561 | Basic rate: 20% |
| £26,562 – £43,662 | Intermediate rate: 21% |
| £43,663 – £75,000 | Higher rate: 42% |
| £75,001 – £125,140 | Advanced rate: 45% |
| Over £125,140 | Top rate: 48% |
Dividend tax allowance cuts
The tax-free allowance for dividend income decrease from £1000 to £500.
Student loan threshold increases
The student loan threshold for some plans has been increased, but the repayment percentage remains the same.
| Plan type | Yearly threshold | Monthly threshold | Weekly threshold |
|---|---|---|---|
| Plan 1 | £24,990 | £2,082 | £480 |
| Plan 2 | £27,295 | £2,274 | £524 |
| Plan 4 | £31,395 | £2,616 | £603 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate Loan | £21,000 | £1,750 | £403 |
Capital Gains Tax changes
The higher Capital Gains Tax (CGT) rate on residential property will fall from 28% to 24%.
VAT registration threshold rises to £90k
The VAT registration threshold will increase from £85,000 to £90,000.
The threshold for deregistration will also rise from £83,000 to £88,000, allowing businesses with declining revenue to deregister sooner.