2024/25 tax rate changes

2024-25 tax year rates and allowances

By Published On: 21 March 2024

National Insurance & Tax

  • Tax-free personal allowance – £12,570

  • Basic rate – 20% up to £37,700
  • Higher rate – 40% – from £37,701 to £125,140
  • Additional rate – 45% – above £125,140

National Insurance Rates

  • Primary threshold – £12,570

  • Secondary threshold – £9,100

  • Employees and directors must pay NI Class 1 contributions at 8% and 2%

  • Employers pay NI Class 1 contributions at 13.8%

Dividend Tax Rates

  • Ordinary rate – 8.75%

  • Upper rate – 33.75%

  • Additional rate – 39.35%

Tax-efficient dividends for Directors

  • Dividends basic rate – £37,700 and a salary of £12,570

  • Tax-free allowance – £500

  • Pay £3,255 Income Tax to HMRC by 31 Jan 2026

Corporation Tax

  • Profits up to £50,000 – 19%
  • Profits above £50,000 to £250,000 will receive a tapered increase to 25%

  • Profits above £250,000 – 25%

Tax-efficient Director’s salary 2024/25

  • It’s up to you to decide, because you control the company, but many will choose a salary of £12,570 for 2024/25

  • Employment allowance of £5,000 towards NIC if you have more than one employee and are eligible

Student Loan Repayments

  • Plan 1 repayment threshold – £22,015

  • Plan 2 repayment threshold – £27,295

  • Repayment rate – 9%

Post Graduate

  • Income is above £21,000 – repayment rate of 6%

Other points of interest

  • National Minimum Wage – increasing from £10.42 to £11.44

  • Capital Gains Tax annual exemption – reducing to £3,000

  • The high income threshold for Child Benefit increases to £60,000

  • From April 2024 the eldest / only child will receive £25.60 per week, and additional children will receive £16.95 per week

Note: All the information and advice in this blog post was correct at the time of writing.

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