{"id":9375,"date":"2024-03-22T16:59:36","date_gmt":"2024-03-22T16:59:36","guid":{"rendered":"https:\/\/aelmarkhams.co.uk\/?p=9375"},"modified":"2024-03-22T16:59:36","modified_gmt":"2024-03-22T16:59:36","slug":"spring-2024-budget-personal-income-tax","status":"publish","type":"post","link":"https:\/\/aelmarkhams.co.uk\/spring-2024-budget-personal-income-tax\/","title":{"rendered":"Spring 2024 Budget \u2013 Personal Income Tax"},"content":{"rendered":"

Personal Income Tax<\/strong><\/span><\/h2>\n

Tax rates and allowances \u2013 2024\/25 (Click Link – Page 2<\/a>)<\/span><\/h3>\n

The Autumn Statement included the announcement that the main personal allowance and the 40% threshold will remain at their 2022\/23 levels until the end of 2027\/28. This represents a tax increase where income rises from year to year. For example, a person with a salary of \u00a350,270 would pay \u00a37,540 in income tax in 2023\/24; if their income increases by 10% to \u00a355,297 in any of the years to 2027\/28, all of the increase will be taxed at 40%, and they will pay \u00a39,551.<\/p>\n

The income level above which the personal allowance is tapered away remains \u00a3100,000; it will be reduced to zero when income is \u00a3125,140, which is also the threshold for paying 45% tax. In the tapering band, the loss of tax-free allowance creates an effective marginal rate of 60%. Once again, annual increases in income will bring more people into these higher rates.<\/p>\n

High Income Child Benefit Charge (HICBC)<\/span><\/h3>\n

The HICBC continues to apply to the higher earner of a couple where one receives Child Benefit and either of them has income of more than a set threshold. For 2024\/25, for the first time since the charge was introduced in 2012\/13, the threshold has been raised from \u00a350,000 to \u00a360,000; the band of income over which the clawback is calculated has also increased from \u00a310,000 to \u00a320,000 (1% of the total benefit for every \u00a3200 of income), so that the whole benefit is lost when income reaches \u00a380,000 (\u00a360,000 in 2023\/24). The HICBC is one reason that an individual might have to register for self-assessment and file a tax return.<\/p>\n

The Chancellor announced plans to reform the HICBC from April 2026 to take into account the combined income of the household, rather than just the higher earner. This will reduce the unfairness of clawing back nothing from a couple each earning \u00a359,000 (in 2024\/25), compared to full clawback where one of the couple earns \u00a380,000. However, it is not a straightforward change because it will require HMRC to have the power to consider the income of the couple rather than as two individuals.<\/p>\n

Scottish rates and allowances \u2013 2024\/25 (Click Link – Page 2<\/a>)<\/span><\/h3>\n

The Scottish government has the power to set its own income tax rates for Scottish taxpayers for non-savings, non-dividend income. In its Budget in December 2023, the following were announced for 2024\/25:<\/p>\n