This month several changes have come into effect that will impact UK businesses across a wide variety of sectors.
From VAT registration thresholds to changes to the R&D tax relief scheme, Andrew Tall, Corporate Tax Partner at HW Fisher, outlines the 10 changes that businesses need to look out for.
“We’ve seen the roll out of several new tax changes in April. For businesses, it is important that they understand exactly what these changes are, whether or not they apply to their business, and if so, the impact it will have so that they can plan as strategically as possible for the year ahead.”
1. VAT registration thresholds
Since 1 April 2024, the threshold for VAT registration has increased by £85,000 to £90,000. The threshold at which a business can ‘deregister’ for VAT has also changed, increasing from £83,000 to £88,000.
2. Minimum wage increases
This month sees the UK’s largest Minimum Wage increase come into effect. The table below outlines the new minimum hourly wages, each of which have increased by at least £1 per hour.
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| From 1 April 2024 | £11.44 | £8.60 | £6.40 | £6.40 |
3. National Insurance Contributions
The main rate of Class 4 contributions has been reduced by 3 percentage points from 9% to 6%. If you are a self-employed individual, you are no longer required to pay Class 2 contributions.
4. New scheme for R&D tax relief
HMRC’s newly merged R&D tax relief scheme starts this month. The new scheme combines the UK’s previous R&D tax relief incentives into one with an effective tax benefit of up to 16.2%.
SME’s which spend more than 40% (30% from 1 April 2024) of their total costs on R&D qualifying expenditure can benefit by up to 27%.
5. Climate Change Levy
The Climate Change Levy (CCL) is paid on the supply of electricity, gas, liquefied petroleum gas and solid fuels to businesses and public sector organisations. It is applied to relevant energy bills by gas and electricity utilities in a similar way to the way in which VAT is applied to energy bills.
This month the main rate of Climate Change Levy (CCL) for gas has been increased to meet the frozen electricity rate, with the main rate for solid fuels being increased proportionally to gas.
You can find the updated rates here.
6. Aggregates Levy
The Aggregates Levy is an environmental tax paid on sand, gravel and rock that has either been dug from the ground, dredged from the sea in UK waters, or imported. For the first time since 2009, the rate has increased from £2.00 to £2.03 per tonne.
7. Tonnage tax
Tonnage tax is a type of Corporation Tax for ‘operators’ of qualifying ships. The aim of the tax is to boost the competitiveness of the United Kingdom within the international shipping industry.
As of this month, tonnage tax elections will, if conditions are satisfied, be open to qualifying companies who ‘manage’ qualifying ships, as well as to those who operate them.
8. Charity tax reliefs
From April, non-UK charities and community amateur sports clubs (CASCs) will no longer be able to claim UK charitable tax reliefs. Tax relief is unaffected for UK CASC’s.
9. Basis period reform
The changes to basis periods this month will impact self-employed traders and any other unincorporated entities with trading income. Going forward businesses’ basis periods will be aligned to the tax year.
This means that a business’s taxable profit or loss will be based on its accounting profits during the tax year, regardless of its accounting date.
10. Cash basis
The cash basis will become the default for unincorporated businesses from April 2024. Businesses will need to opt out annually to continue using the accruals basis.
For more information on these changes and how they might impact your business, you can get in touch with Andrew Tall here.
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