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Which self-employed training costs are tax deductible?

If you are self-employed, you should already be aware that you can deduct some of the running costs of your business from your taxable profit to reduce your tax bill.

Allowable expenses include costs like office equipment, clothing, travel, insurance, advertising, staff, premises, and stock or raw materials that you buy to sell on.

These expenses do not include business money used for private purchases, and you cannot claim allowable expenses if you use your tax-free trading allowance.

However, some self-employed individuals may not know that some training costs are also tax deductible – such as training courses that help you to update or expand your current skills relating to the operation of your business.

HMRC recently updated its online guidance on the tax deductibility of self-employed training costs, so here’s a quick explanation of which training costs count as tax deductible for self-employed people and which ones don’t.

CGT planning for buy-to-let owners selling up

Previously, when property prices were on the rise and mortgage costs weren’t so high, buy-to-let properties were a worthwhile investment for many landlords in the UK.

The same can’t really be said in 2024, with inflation and rising interest rates cancelling out savings from the Capital Gains Tax (CGT) rate reduction, and the progressing Renters’ Reform Bill potentially making regulations stricter for landlords.

The government also announced in the Spring Budget that tax reliefs for furnished holiday lets will be scrapped from April 2025, which would make holiday lets less profitable for second home owners, who may decide they would rather sell up.

Employees can request flexible working from their first day

Flexible working rights allow employees to find a way of working that suits their needs, while meeting the needs of their employers, too.

This can involve more flexibility in working hours or work locations – for example, adjusting start and finish times, or working from home part-time or full-time.

Employees have the right to make a flexible working request, known as a statutory application, to their employer – though employers aren’t obligated to approve them.

Previously, employees would have to work for their employer as normal for 26 weeks before being able to make a flexible working request.

However, new changes came into effect on 6th April 2024, allowing all employees to apply for flexible working requirements from their first day of employment.

The end of multiple dwellings relief for SDLT

When buying two properties or more in a single or linked transaction, it’s currently possible to reduce the overall rate of Stamp Duty Land Tax (SDLT) through multiple dwellings relief.

This is a bulk purchase tax relief that allows the buyer to pay SDLT on the average price of each of the dwellings, so they can benefit from lower SDLT bands.

However, from 1st June 2024, the UK government will abolish multiple dwellings relief for SDLT to avoid disputes over questionable claims, particularly whether ‘granny annexes’ qualify.

This will impact buyers who purchase multiple properties in single or linked transactions from June 2024.

More higher rate taxpayers than ever expected by 2028

Leading up to this year’s Spring Budget, the media has often portrayed the Office for Budget Responsibility (OBR) as a powerful body that can constrain the tax-cutting options of the Chancellor ahead of the upcoming general election.

However, this is an over-simplification, as the OBR doesn’t set the fiscal rules, the Chancellor does – the OBR only calculates whether the Chancellor can meet his rules or not. Nor does the OBR set the assumptions underlying these rules.

For example, when estimating the government’s tax revenue from 2025 onwards, the OBR followed the Treasury’s assumptions that fuel duty cuts will be scrapped and fuel duty will rise with inflation, but nobody expects this to actually happen, as fuel duty rates haven’t risen since 2010.

Despite such limitations, the OBR has highlighted the impact of the lack of tax changes in the Chancellor’s plans, with new calculations showing that the status of ‘higher rate taxpayer’ is becoming increasingly common due to tax freezes.

The cost of retirement in 2024

Every year since 2019, the PLSA (Pensions and Lifetime Savings Association) has been sharing research into the retirement costs for couples and single people.

Their findings are presented in three categories of living standards, which include:

Minimum – covers basic needs with a little disposable income.
Moderate – provides more security and flexibility with finances.
Comfortable – offers greater financial freedom and luxuries.
Their latest figures show what life might look like for retirees at each level going into 2024, and the necessary expenditure for reaching certain living standards.

Here is a guide to the rebased figures for retirement living standards, and what this could mean for your future if you are approaching or currently saving for retirement.

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