Key Updates 2024-2025 Tax Year

Here a summary of key updates that are relevant to the 2024-2025 tax year:

  • The National Living Wage increases to £11.44 per hour for those aged 21 and over.
  • The National Minimum Wage for those aged 18-20 increases to £8.60 per hour.
  • The apprentice rate increase to £6.40 per hour.
  • Dividend rates remain at: Basic rate 8.75%  Higher rate 33.75%, and Additional rate 39.35% and the dividend allowance is reduced to £500 from £1,000.
  • Adjusted net income threshold for the High-Income Child Benefit Charge (HICBC) rises from £50,000 to £60,000.
  • Children from the age of two will be entitled to 15 hours of free childcare.
  • Children from 3 to 4 will be entitled to 15 hours of childcare, which can be increased to 30 if the parents are eligible.
  • Children from the age of 9 months will be entitled to 15 hours of free childcare (from September 2024).
  • Finance Act 2024 makes the cash basis the default method for calculating trading profits for the self-employed and partnerships. Businesses not wishing to calculate their profits using the cash basis will need to make an election to use the accruals basis.
  • National Insurance updates:
    • Class 1 NICs Main Rate is 8% (employees)
    • Class 4 NICs Main Rate is 6% (self employed)
    • Class 2 Rate (for those paying voluntarily) is £3.45 per week
    • Class 3 Rate is £17.45 per week
  • Pension updates:
    • There is no lifetime allowance and the annual savings limit remain at £60,000.
    • For those without protections the pensions tax-free lump sum will be limited to 25% of the current lifetime allowance (LTA) limit or £268,275
    • The Tapered annual allowance applies when adjusted income is more than £260,000.
  • Capital Gains Tax Updates:
    • The annual exemption is reduced to £3,000 from £6,000 for individuals and from £3,000 to £1,500 for most trustees.
    • The higher rate of CGT on the disposal of residential property is reduced to 24% from 28%
  • The VAT registration taxable turnover threshold increases from £85,000 to £90,000


If you would like to discuss issues arising from this article or to find out more on the applicable tax strategies, please contact Tobi Lab via email at