Advisors will be viewing the advent of 2024 with some trepidation. Politics aside, the present government will be seeking to please voters with tax cuts and other give-a-ways and the opposition will have its own fiscal tempters to win over voters.
In which case, expect a few significant changes in the March 2024 budget announcements.
As we posted last month, Companies House changes will be impacting filing requirements next year and we are moving ever closer to MTD for ITSA.
On the latter point, MTD for ITSA, working with clients who are mandated to join the scheme from April 2026, will require at least a year of planning and cajoling to convert clients (particularly landlords, who are used to dumping diaries and receipts in your office), and get them using appropriate digital records in time for the switch over April 2026 – at least for those with turnover above £50,000.
The changes to the National Living and Minimum Wage rates April 2024 will need to be observed by clients. As the increases are significant, affected clients with a large workforce will need to rethink their payroll budgets and recalculate cash flow and profit statement to see if the cost increases will need sales price hikes to maintain profitability.
Of course, all of this activity will impact the time taken to deliver compliance services to clients. If fees are already under pressure will there be a reduction in the profitability of delivering compliance work or will there be a loss of even more clients to firms who can cope with lower margins?
Only time will tell.
#taxcuts #makingtaxdigital #ITSA #NationalLivingandMinimumWage