As we usher in 2025, it’s crucial for both expatriates and UK residents to stay informed about the latest tax regulations and deadlines to ensure compliance and optimise financial outcomes. Below is a comprehensive overview tailored to assist you in navigating the UK’s tax landscape effectively.
Key Tax Deadlines
- Online Self-Assessment Tax Return: For the tax year ending 5 April 2024, the deadline for submitting your online self-assessment tax return is midnight on 31 January 2025.
- Paper Tax Return: If you opted to file a paper return, it should have been submitted by 31 October 2024.
- Tax Payments: Any tax owed for the 2023-2024 tax year must be paid by 31 January 2025 to avoid penalties.
Changes to Non-Domiciled (Non-Dom) Tax Status
Significant reforms to the non-dom tax regime are set to take effect from 6 April 2025:
- Transition to Residence-Based Taxation: The UK will shift to a residence-based tax system, requiring non-domiciled individuals to pay UK tax on their global income after four years of residence, reduced from the previous fifteen years.
- Inheritance Tax Adjustments: Non-doms will be subject to UK inheritance tax on overseas assets after ten years of residence, with this liability extending up to ten years after leaving the UK.
- Temporary Repatriation Facility: Available for a limited period of three tax years from 2025-2026, allowing non-doms to remit foreign income and gains at reduced tax rates—12% for the first two years and 15% in the final year.
Implications for Expatriates
- Split Year Treatment: If you leave or arrive in the UK partway through a tax year, you may qualify for split year treatment, taxing you as a UK resident only for the UK part.
- Self-Assessment Requirements: Non-resident individuals receiving UK income, such as rental income, are generally required to file a Self-Assessment tax return (SA100) along with the supplementary residence page (SA109).
Simplified Tax Returns for Individuals
- Personal Savings Allowance: Basic-rate taxpayers can earn up to £1,000 in savings interest tax-free, while higher-rate taxpayers have a £500 allowance. With current interest rates, it’s easier to exceed these thresholds, so monitoring your savings interest is advisable.
- Utilising ISAs: Maximizing contributions to Individual Savings Accounts (ISAs) can shelter your savings from tax. The annual ISA limit remains at £20,000.
Penalties for Late Filing and Payment
- Late Filing: An initial £100 penalty is imposed for returns filed after 31 January 2025, with additional daily penalties accruing after three months.
- Late Payment: Interest is charged on late payments, and additional penalties may apply if the delay extends beyond 30 days.
How CloudAcc Can Help
At CloudAcc, we understand the complexities of payroll and the challenges businesses face in staying compliant.
Contact our expert team today to see how we can make your payroll process seamless and compliant. Please get in touch.