Ready for April?
Finance experts at RIFT have spilled the beans on what you need to know before the tax year flips the switch on the 5th of April. In the last decade, HMRC’s income‑tax receipts have been on a steady climb, growing an average of 5.7 % each year.
When the Clock Ticks
- 5 April – The old fiscal year ends. Anything you need to file today is still part of the current cycle.
- 6 April – The new financial year kicks off. That’s when fresh tax rates, allowances, and all the goodies from the latest Spring Budget roll out.
Why It Matters
Getting your paperwork in on time means you can avoid last‑minute scrambles, and you’ll dodge the “new rates” surprise that lands right on you if you’re on the fence.
Quick Take‑away
- Keep track of the 5th April deadline.
- Lock in any tax‑related updates before 6th April to snag the new rates.
- Remember: a 5.7 % year‑over‑year rise is no joke—it means HMRC is gathering more money each year.
We’re paying HMRC more tax
Tax‑Tally 2023: HMRC’s Stacked Coffers and the Upcoming Chaos
Bottom line? The government’s own data, as dissected by RIFT, shows we’re shelling out more taxes than ever in the last ten years. In fact, the total income tax receipts ran in at a solid £268 million for 2023. That’s a steady climb of about 5.7 % per year since 2013—like a never‑ending escalator into the tax‑powl.
What’s Stirring the Pot
- New rules on the horizon. Both folks and firms are bracing for a wave of changes that could rewrite the way we see and pay taxes.
- April’s got the longest tail. Even before mid‑year rush, the first month is already stretching HMRC’s bandwidth tighter than a February snow‑drift in a traffic jam.
- The “help & advice” queues grow. With deadlines looming, the tax office will feel the heat of half a million questions in a single year.
Why HMRC’s Skirt is On the Edge
All these fresh regulations plus the ever‑growing income tax sums mean HMRC’s got to juggle more than a circus clown on a unicycle. They’re facing a tightrope walk through policy changes while keeping taxpayers and businesses from feeling like they’re in a grammar‑pendent nightmare.
Bottom Line: Get Ready, Watch Your Wallet
Whether you’re a small business owner or a self‑employed freelancer, keep your eyes peeled for the upcoming changes. And don’t expect a walk in the park—this tax season is going to feel a lot more like a marathon.
April a busy time for HMRC helpline
April: The Boom‑Bash of the HMRC Helpline
What the Numbers Say
- Calls to the tax helpline in April are 12.8 % higher than the yearly monthly average.
- ⏱ And the waiting game? The average hold time has jumped a whopping 25 % longer than at any other month.
Why It Matters
If you’re reading this before hitting the phone, you’re probably wondering: “What’s the deal and how will it hit me?” RIFT has cut a list of the nine essentials that are worth a glance as the 2024/25 tax year rolls around.
Nine Things You Should Know
- New Filing Deadlines: The dates shift, so set a calendar reminder.
- Updated Tax Rates: Some brackets have adjusted; check your bracket to avoid surprises.
- Digital First: Remote submissions are getting smoother – tap, type, submit.
- Cash‑less Conversions: Banks are offering new ways to manage payments.
- Audit Preparedness: Keep records organized; you never know when HMRC pops in.
- Communication Boom: The helpline’s swelling call volume means better response times could improve.
- New Guidance PDFs: Avoid the “lost in scroll” trap; read straight from the source.
- Tax Credits Tweaked: Some credits might be phased out or added – brace for change.
- Compliance Incentives: The government sometimes offers incentives for timely filing.
In short, April’s the month to test your patience (and your phone etiquette). These changes mean that staying informed is as crucial as a coffee break during a long call. Keep your eyes on the headlines and your documents in order, and you’ll sail through the 2024/25 tax year with fewer hiccups and more smiley texts from HMRC.
National Insurance Contributions (NIC)
Tax Bill Gets a Friendly Gently Lowered Polite
As of 6 April, the government is giving quite a friendly nudge to the main National Insurance Class 1 rates. They’re dropping the percentage from 10% straight down to 8%. That squeak in the rates, together with the previous Autumn Statement tweak, works out to a tidy £4 per person tax cut. Think of it as a small yearly cup‑of‑coffee for the government, a modest £4 for you.
How many people get in on the action? Roughly 27 million folks. For families where both parents are earning, everyone with two earners seeing the same average salary can expect to pocket a decent £1,800 bump over the year. Imagine that extra padding in the wallet for a weekend getaway or just for fun!
Self‑Employeds, Let’s Talk About Your Anniversary!
Self‑employed murder‑melodies also get a bump. The Class 4 main NICs drop from 9% to 6%. That’s a bright reduction that is now targeting over 2 million freelance palates, artisans, tech wizards and start‑up whizzes. A 3p shrinkage plus eliminating the extra Class 2 tax altogether means that an average self‑contained worker of a £28,000 income is slicing out an extra £650 a year. Free in the pocket, not to mention the glow that comes with feeling a tiny bit less pressured by bureaucracy.
Bottom‑line: it’s a modest tune, but for millions, it’s the small slice of relief you need to keep on moving forward on April 2024.
National Living Wage and National Minimum Wage Changes
Good News for Your Wallet: Wages to Rise!
What’s Changing?
- National Minimum Wage – £10.42 £11.44 (a 9.8% bump)
- National Living Wage – £10.42 £11.44 (same percentage upgrade)
- Age Extension – Now includes 21‑ and 22‑year‑olds
- Number Benefiting – Roughly 3 million people will enjoy the raise
Why It Matters
For anyone working your hard earned hours, that extra pound on the clock means more weekends, more streaming subscriptions, or just a bit more breathing room. And now, younger workers aren’t left in the dust; those budding professionals at 21 and 22 will stand to gain too.
Quick Takeaway
If you’re 23 or older, check your paycheck on 1 April – you’ll notice the rate climbing by £1.02. For everyone else, the same sweet spot of £11.44 is already in play faster than you can say “cash‑flow.”
Bottom Line
Time to celebrate – wages are increasing, the curve is flattening for the younger crowd, and almost three million people will taste the taste of a fairer paycheck. So, buckle up, pay‑bee’s benefactors – the number crunch is in your favor!
Dividends Allowance Reductions
Dividend Tax Update 2024/25 – What’s Changing?
For the upcoming tax year (2024‑25), the dividend income tax rates are sticking with the status quo. However, there’s a twist: the dividend allowance is being cut in half – from £1,000 down to just £500 – starting April 6th.
How Many People are Involved?
- 4,405,000 folks will feel the pinch in 2024‑25.
- About 27% of those with taxable dividends won’t notice any difference.
- The average loss for the impacted group is roughly £155 for the tax year.
Why It Matters
Imagine your dividend checks shrinking a bit. That’s the gist – taxpayers get fewer pounds exempt from tax, which translates into higher take‑home tax costs for countless households.
So, if you’re among those who’ll be snagged by this tweak, keep an eye on your dividend taxes. It’s a small change on paper, but it adds up!
Business Rates in England
Brace Yourself: Business Rates Take a Year-Long Nap
Picture this: the business multiplier, the fancy term that shapes how much shopkeepers and start‑up owners pay, decided to hit the pause button and stay still for a full 12 months. From the very first day of April, the amount that businesses owe to local councils will remain frozen—no increase, no hike, nothing.
What Does “Frozen” Mean?
- No price bump – Your bills will not climb higher for the next year.
- Budget certainty – You’ve got a stable ball‑park to plan with.
- Simple math – No extra calculations, just the same rates you’ve been paying.
When It Starts
On 1st April 2025, the freeze kicks in. If you’re a shop owner, café owner, or principal of a small company, this is a breather for your cash flow.
Why the Chill?
To keep the economy steady and give businesses a bit of breathing room amid uncertain times, the government decided the rates should stay put.
So, while the calendar rewinds, your calculator can relax. No extra cost to worry about—just a smooth, predictable year ahead. Cheers to that!
Pension Lifetime Allowance Abolished
New Pension Rules Gone Live on April 6th
Heads up, pension shoppers! On April 6th Britain drops the old Pension Lifetime Allowance and makes life a tad less tax‑tangled.
What’s Changing?
- No Lifetime Allowance – you can stash as much as you like without that sneaky cap.
- Clearer tax rules for lump sums and death benefits – no more guessing games.
- More tax‑free cash for the average lock‑in pension holder.
Why You’ll Love It
If you’re saving for retirement in a registered pension scheme, expect to get a bigger chunk of your withdrawals back untouched by tax. That means more money in your pocket when you finally roll into retirement.
Bottom Line
Put simply: April 6th is the day you can stop worrying about those pesky tax limits and start enjoying a smooth, tax‑friendly haul from your pension.
Capital Gains Rates
Heads‑Up: The Capital Gains Tax Shake‑up
Alright, folks. The government’s decided to cut the capital‑gains tax allowance from £6,000 to £3,000 for most of us… meaning ordinary individuals and their personal reps. Trustees, sorry, you’re on a different track.
What this means for you
- Less room for error. If your gains exceed the new £3,000 threshold, you’re looking at a higher tax bill.
- New racers. By 2024‑25, roughly 260,000 people and trusts will face capital‑gains tax for the first time.
- Landlords beware. In England and Wales, buy‑to‑let landlords may see their tax bill climb by about £2,610 because the allowance tumbled.
Why the cut?
Think of it as tightening the screws on the tax machine – the idea is to broaden the tax base. In practice, that means more headaches and a few “What the heck?” moments from taxpayers.
Getting in the know
Watch your next tax return. A tiny slip‑up can now add a few extra coins to your CGT balloon. If you’re a landlord, plan that extra £2,610 wisely.
Bottom line
Stay chill but stay alert. Lower allowances = higher taxes. Keep your records tight, and maybe toss in a dad‑joke meme to lighten the mood.
ISA Limits Freeze
ISA Limits Aren’t Moving in 2024/25 – But New Rules Let You Grab Them Like Confetti!
So, you’ve heard the whispers: ISA limits stay frozen this year. That means you can still plough up to £20,000 into your savings without the tax goliath snatching a bite. No surprise there. What’s actually floored, though, is how easy it is to pull the trigger on those investments—thanks to the fresh tweaks in the rules.
What the Average Person Is Really Doing
- Cash ISA: On average, folks are putting in about £4,330.
- Stocks & Shares ISA: The usual stash sits at around £8,690.
- Innovative Finance ISA: That’s roughly £8,520.
- Overall Average: About £5,696 is being invested across the board.
New Tricks for Savvy Investors
Hold onto your hats—because you can now subscribe to multiple ISAs of the same type within a single year. Yes, that’s a real thing. In plain English:
- You can open a new Cash ISA after you’ve already opened one.
- Same goes for Stocks & Shares—multiple accounts, same year.
- Innovative Finance? You’re welcome.
And if you’re switching banks or platforms for a better deal, you can now do partial transfers. That means you’re not stuck holding onto a stale rate or a provider that’s stuck in 2008. Flexibility is the new normal.
Why This Is the Best Decision Since Purring Cats and Muffins
Imagine you’re a money‑mixer. By letting you play multiple ISAs, you can test different flavours (interest rates, returns, risk levels) and pick the best bite.
Here’s how the numbers line up:
- Cash ISA: Up to 2.43% (variable) or a whopping 4.51% for a fixed‑term one‑year deal.
- Innovative Finance ISA: Rates in the 4%–10% range—so it’s like a cocktail of growth options.
Bottom line: Your money can now do more than just sit on a digital table. It can shuffle, bump, and bump again—just like a good party playlist.
Takeaway
Hold onto those £20,000. Mix them up. Transfer them around. And keep the fun alive while your money grows. That’s what 2024/25 is all about—unlocked flexibility, no tax headaches, and a real chance to make your stash do the hustle.
Research and Development Merging with SME Schemes
Heads‑Up for the R&D Brigade!
Think you’ve got the tax‑break boss? Well, the Research and Development Expenditure Credit is about to swap suits and team up with the SME tax plans.
Effective April 1st, any money you rake in by dabbling in R&D will now be filed through the newly merged scheme. So, next time you’re ready to claim that sweet deduction, just thread it through the combined portal.
Tax refund deadlines
Is HMRC Holding a Cash‑Prize in Your Pocket?
Have you ever paid a little more tax than you actually owe? If you have, you might just be standing on a pile‑of‑money that you can claim back! HMRC lets you move up the money for the last four tax years, but you’re on a tight clock. Once the tax year closes, the trail is sealed.
Deadlines to Watch – They’re as Sticky as Sticky Notes
- 2019/20 (ended 5 April 2020) – claim by 5 April 2024
- 2020/21 (ended 5 April 2021) – claim by 5 April 2025
- …and the pattern continues for each succeeding year.
Miss the window and you’ll almost certainly not get your refund. HMRC has a tiny loophole called “Extra‑statutory Concession B41” for “official error” cases – but only if someone else has truly messed up the records. That’s a rare (and tricky) exception, so the safest bet is to file early.
Why You Shouldn’t Wait for the Presentation “Round” of the Year
Bradley Post, Managing Director at RIFT, sums it up well: “We all glide through the fiscal year, keep our expectations fuzzy until the next payslip or a chat with our accountant. Big changes are coming this year, and they’ll ripple from full‑time workers all the way to the self‑employed. Some shifts will help, some will, well, not.
They’re also warning that help from HMRC can be delayed. Even after the tax helpline was reopened, April still sees about 13 % more calls per month than the yearly average. The waiting time spikes at around 25 % longer in April. The kicker? If you need advice, trouble is likely to happen first – so get ahead of that.
Bottom line: Ask before April, before you’re asked to—otherwise you might end up mid‑month chasing a closed case that’s gone “out of show.” The earlier, the cheaper your time, and the easier it’ll be to snag that refund.
