Changes

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HMRC’s New £3,000 Tax Rule – What Does It Mean for You?

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If you earn a little extra on the side, whether that’s selling online, freelancing, dog walking, tutoring or renting out a room, you may have heard about HMRC’s planned changes to how this income is reported.

Currently, if you earn under £1,000 of self-employed or casual income per tax year, you benefit from the trading allowance – meaning you don’t need to report that income at all.

But this is set to change.

What’s changing and when?

The government has announced plans to increase the threshold for reporting untaxed income to £3,000. While the exact launch date is still to be confirmed, it’s expected to come into effect before the end of the current parliamentary term, which runs until 2029.

When introduced, this rule is designed to make things easier for people who earn small amounts on the side – and to reduce the number of people needing to submit a full Self Assessment tax return.

What will the new rule mean?

Under the new £3,000 rule, here’s what you can expect:

  • Earn under £1,000 per year from side income?
    You’ll still benefit from the trading allowance – no change, and no need to report it.
  • Earn between £1,000 and £3,000?
    You won’t need to complete a full Self Assessment return, but you will need to declare this income via a new, simplified online process HMRC is developing.
  • Earn over £3,000?
    You’ll still be required to register for Self Assessment and file a tax return as usual.

Who does this apply to?

This new rule is aimed at anyone earning extra income outside of traditional employment, including:

  • Sellers on platforms like Vinted, Etsy or eBay
  • Casual work like cleaning, delivery driving or tutoring
  • Rental income (e.g. Airbnb or spare rooms)
  • Freelancers and sole traders with smaller income streams

Even if you’re already employed and taxed via PAYE, you’ll still need to track and report your additional earnings correctly.

What to do next

If you’re unsure how these changes affect you, or you’d like to start preparing now, we’re here to help.

At SA Lee Accountancy Ltd we offer friendly, expert advice to ensure you stay compliant – without the stress.

💬 Need guidance on self-employment income or preparing for Self Assessment?
Contact us today – we’re here to make tax simple.

For more updates and support, visit our website.

Navigating the Autumn 2024 UK Budget: Implications for Your Business and How SA Lee Accountancy Can Assist

Navigating the Autumn 2024 UK Budget: Implications for Your Business and How SA Lee Accountancy Can Assist

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The Autumn 2024 UK Budget introduces significant changes that will impact businesses across various sectors. Understanding these developments is crucial for maintaining compliance and optimising your financial strategy. At SA Lee Accountancy Ltd, we are committed to guiding you through these changes, ensuring your business remains resilient and well-prepared for the future.

Key Budget Changes Affecting Businesses

Employer’s National Insurance Contributions (NICs)

Effective from April 2025, the government will increase the rate of employer NICs by 1.2 percentage points to 15%. Additionally, the per-employee threshold at which employers start to pay National Insurance will be reduced from £9,100 per year to £5,000 per year.

Corporation Tax

The corporation tax rate remains at 25% for companies with profits over £250,000, while those with profits under £50,000 continue to be taxed at 19%. A tapered rate applies to businesses with profits between these thresholds. This structure necessitates careful tax planning to manage liabilities effectively.

Inheritance Tax (IHT)

The IHT nil-rate bands are set to remain at current levels until 5 April 2028. Additionally, from April 2027, pensions will be counted as part of the assets subject to IHT, potentially affecting estate planning strategies.

Support for Green Initiatives

The budget reinforces commitments to sustainability, offering incentives for businesses investing in renewable energy and energy-efficient technologies. Grants and tax breaks are available to encourage environmentally friendly practices.

Investment in Skills and Training

Addressing skills shortages, the budget introduces support for workforce training and development. Businesses can access funding schemes to upskill employees, enhancing competitiveness and productivity.

 

 

How SA Lee Accountancy Ltd Can Support Your Business

Navigating these changes requires strategic planning and expert guidance. SA Lee Accountancy Ltd offers comprehensive services to help your business adapt and thrive.

The Autumn 2024 UK Budget presents both challenges and opportunities. With SA Lee Accountancy Ltd by your side, you can confidently navigate these changes and position your business for sustained success. Contact us today to discuss how we can tailor our services to meet your specific needs and help you make the most of the new fiscal landscape.