What You Need to Know
The world of tax is ever-evolving, and as we approach the new tax year, it’s crucial to stay informed about the upcoming changes to income tax reporting. At Max Pro Accountants and Tax Advisers, we’re here to break down these adjustments and ensure you’re prepared.
Every tax year brings updates to self-assessment returns, including the SA100 for individuals and the SA900 for trusts and estates. While minor tweaks are typical, recent budget changes have introduced some significant shifts, especially concerning Capital Gains Tax (CGT).
Understanding the 2024/25 Changes:
The most notable alteration involves CGT rates. In October 2024, the Chancellor announced an increase in CGT rates for assets other than residential property. The basic rate rose from 10% to 18%, and the higher rate from 20% to 24%, effective immediately.
Due to the late timing of this announcement, HMRC was unable to fully update the 2024/25 SA100 return. This means that you will need to use an HMRC calculator to determine an “adjustment figure” for your CGT calculations, which will then be entered into box 51 of the SA108. This is particularly important if you have sold shares, land, or crypto assets after October 30th, 2024.
Trusts and estates will also see changes, with a new adjustment box added to the SA905 and a similar calculator provided. Importantly, trusts and estates with non-residential CGT disposals after October 30th, 2024, are advised to wait until the 2024/25 SA900 return is published in April before filing.
Cryptoasset holders
You will face a double challenge. Not only will you need to account for the CGT rate changes, but you will also be required to report income and gains from crypto asset transactions separately for the first time. This reflects HMRC’s efforts to enhance data collection and compliance in this area.
Looking Ahead: 2025/26 and Beyond:
The 2025/26 tax year will introduce further changes. Businesses starting or stopping during the year will be required to include the commencement or cessation dates on their returns. Additionally, Directors receiving dividends from close companies will face more stringent disclosure requirements, including providing the company’s name, registration number, dividend amounts, and the highest percentage of share capital held.
Beyond 2025/26, the implementation of Making Tax Digital (MTD) for individuals with turnovers exceeding £50,000 will bring even more significant changes. While the specifics of the new end-of-year submission are yet to be fully revealed, it’s clear that ongoing adaptation will be necessary.
Stay Informed with Max Pro Accountants and Tax Advisers:
Navigating these changes can be complex, but you don’t have to do it alone. We are committed to providing clear and accurate guidance to help you stay compliant. Whether you’re dealing with CGT adjustments, new disclosure requirements, or preparing for MTD, we’re here to support you.
If you have any queries or questions about these upcoming changes, please don’t hesitate to contact us. HERE
We’re here to help you navigate the evolving landscape of tax reporting.