News FlashesApril 10, 2024

News Flash 9 April 2024 – UNITED KINGDOM – Statutory changes for the 2024/2025 tax year

It is important that employers note the following:

Statutory changes effective 6 April 2024
Following the delivery of the Spring Budget on 6 March 2024, the Spring Budget Bill 2024, Finance (No.2) Act 2024 was published on 13 March 2024, bringing the announced tax changes into law.

An overview of all the tax legislation and rates are summarised below.

Personal allowance:
The standard employee personal allowance for the 2024/2025 tax year in England, Northern England, Scotland and Wales remains unchanged as follows:
• £242 per week
• £1,048 per month
• £12,570 per year

Where the income is above £100,000, the personal allowance reduces by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of date of birth.

The income limit for married couples’ allowance is an age-related allowance. It is reduced by £1 for every £2 of income over this limit.

Tax rates:

The tax rates for England, Northern England and Wales remain the same, but those for Scotland have changed.

In addition to the current band adjustments, a new tax band with a 45% tax rate was added to the schedule, and the top tax band’s tax rate was increased to 48%.

National Insurance Contributions (NIC)
At the Autumn Statement on 22 November 2023, the government announced the National Insurance changes effective from January 2024. The rates remain the same for the 2024/2025 tax year.

In addition to the reduction in rates, the national taxing authority, His Majesty’s Revenue & Customs (HMRC), also confirmed that the married women’s reduced rate of National Insurance contributions was cut by 2% from 5.85% to 3.85% from 6 January 2024.

Class 1 National Insurance Contribution rates:
The Class 1 National Insurance rates for employed people for the 2024 to 2025 tax year are:

Employer contribution rates remain the same.


Student loan thresholds

·        Employees repay 9% of the amount they earn over the threshold for Plan 1, 2 and 4.

·        Postgraduate loans — £21,000 annually (£1,750 a month or £403.84 a week).

Employees repay 6% of the amount they earn over the threshold for postgraduate loan.

Company car advisory fuel rates
These rates only apply to employees using a company car.

Use the rates when you either:
• Reimburse employees for business travel in their company cars.
• Need employees to repay the cost of fuel used for private travel.

These rates should not be used in any other circumstances.

Petrol and LPG (Propane):


• From 1 March 2024 the advisory electric rate for fully electric cars will be 9 pence per mile.
• Hybrid cars are treated as either petrol or diesel cars for advisory fuel rates.

National minimum wage and national living wage
These rates are for the national living wage (for those aged 21 and over) and the national minimum wage (for those of at least school-leaving age). The rates change on 1 April every year.

Effective 1 April 2024, the rates are:

Statutory maternity, paternity and parental pay

Statutory maternity pay (SMP) for eligible employees can be paid for up to 39 weeks, usually as follows:

·        The first 6 weeks: 90% of their average weekly earnings (AWE) before tax.

·        The remaining 33 weeks: £184.03 or 90% of their AWE (whichever is lower).

Tax and national insurance need to be deducted.

Statutory sick pay rates

Employees can get £116.75 per week statutory sick pay (SSP) if they are too ill to work. It’s paid by the employer for up to 28 weeks.

Employees cannot get less than the statutory amount. They can get more if the company has a sick pay scheme (or ‘occupational scheme’).

To view the Spring Budget Bill 2024, Finance (No.2) Act 2024, follow the link.






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2024/2025 Tax Guide

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