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In a bold move that took everyone by surprise, including members of his own party, Prime Minister Rishi Sunak announced on 22nd May that the next UK general election will take place in several weeks – on 4th July 2024.

Earlier in the year, Sunak said that he was working with the assumption that the election would be held ‘in the second half of the year’. While most people expected a winter election, the July date technically meets that description.

So, what happens next, and what does this mean for UK tax policies?

Frozen or reduced tax allowances and rising income – from interest, dividends, or pensions – all provide a recipe for higher tax bills and more taxpayers.

An increasing number of people who hadn’t been liable for tax before are discovering that they are now taxpayers, despite their only income in 2023–2024 coming from a State Pension (whether new or old).

Those who are affected by such tax changes should receive a simple assessment tax bill from HMRC (HM Revenue & Customs), as the DWP (Department of Work & Pensions) provides payment details.

If you miss the deadline for submitting a self-assessment tax return or for paying outstanding tax, HMRC can charge ongoing interest and financial penalties.

About 1.1 million people failed to submit their 2022–2023 self-assessment returns on time before the deadline of 31st January 2024, and now face daily penalty charges.

From 1st May, HMRC has been applying a £10 daily penalty for late submissions. This can run for up to 90 days, potentially reaching the maximum late fine of £900.

This penalty applies for late tax return submissions even if no tax is owed. For those with outstanding tax payments, HMRC can also charge up to 7.75% late payment interest, on top of a penalty of up to 5% of the outstanding balance.

The longer it takes to file your self-assessment tax return and pay any tax you owe, the more you’ll end up paying – so what should you do if you receive a penalty notice?

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.

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.

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.