2024 – a year of change

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Chartered Accountants & Tax Advisers

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The Government’s legislative agenda gathered pace in 2023 and will cast its shadow well into 2024. We can certainly predict the promise of a General Election will also see all political parties ramping up their promises to the electorate, with the new year promising to be a busy and sometimes challenging 12 months. Here are just a few things businesses will have to address this year.

Greater corporate transparency means more rules for companies.

The Economic Crime and Corporate Transparency Act passed into law in October and will come into full force in the coming months. It gives Companies House enhanced powers to improve the quality and reliability of the data it demands from businesses and to streamline the delivery of financial information.

The Act introduces many new measures, some of which will require secondary legislation before they can be implemented. But here are seven things that will come into force this year:

  • An important change expected in 2024 is the removal of what we call abbreviated accounts for small companies. While reduced disclosure will still be available, it is expected that even small companies will have to file their profit and loss account and directors’ report at Companies House. This is mostly in an effort to support the ease with which credit reference agencies can gather information.
  • Greater powers to query information, with Companies House able to scrutinise and reject information that seems incorrect or inconsistent with information it already holds. There will also be stronger checks on company names.
  • New rules for registered office addresses, meaning all companies must have an appropriate address at all times. Companies will no longer be able to use a PO Box as their registered office address.
  • A requirement for all companies to supply a registered email address. Additionally, all new and existing company directors, Persons with Significant Control or anyone else submitting filings will need a verified account at Companies House.
  • A requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate. Every year, companies will need to confirm that its future activities will be lawful on their confirmation statement.
  • Flagging information held by Companies House to let users know about potential issues with the information provided by companies.
  • Greater sharing of data with other government departments and law enforcement agencies.

The new rules will place a greater burden on directors in providing verified information, meaning a lot more checks on submissions to companies House, with the intention of ensuring the data at Companies House is more useful to those who search it.

Speak to your usual advisor for any queries from the article above.

National Living Wage and National Insurance

November’s Autumn Statement announced an increase to the National Living Wage of £1,990 per person (working a 37.5-hour week). That change will take effect from 1 April 2024.

The Chancellor abolished Class 2 National Insurance contributions (NIC) and reduced Class 4 NIC from 9% to 8% from 6 April 2024 for the self-employed (including partners in professional partnerships).

From 6 January 2024, a reduction in Class 1 National Insurance contributions from 12% to 10% will benefit some 27 million people.

2024 is a good year to review your National Insurance records and state pension entitlement. You may be able to boost your pension with voluntary contributions if there are gaps in your NI contributions, but you will need to do this before April 2025. More details

Customs Declaration Service

2024 will see considerable change for businesses that import and export goods. Here is a summary of key dates:

  • 1 January 2024. The Extended Producer Responsibility is now operational with importers if goods into the UK with packaging now required to report as it will have a tax impact from the 2025 tax year.
  • 31 January 2024. The Border Operating Model will begin, requiring health certification on imports of medium-risk animal products, plants and plant products and high-risk feed of non-animal origin from the EU and the removal of pre-notification requirements for low-risk plant and plant products from the EU.
  • 20 March 2024. All businesses that import goods will need to use the Customs Declaration Service.
  • 30 April 2024. Introduction of a simplified process for imports from non-EU countries to begin, including the removal of health certification and routine checks on low-risk animals, plants, and plant products.
  • 31 October 2024. Introduction of safety and security declarations for imports into the UK from the EU or other territories to apply. All products will now need a Phyto Sanitary Control which categorises products as low, medium, and high risk.

Businesses are advised, however, to check these dates given previous delays and changes. Ruth Corkin will be covering all of the customs changes in her Customs Update workshops in February – for more information and to book your place visit.

Carbon Border Adjustment Mechanism

The UK government will in 2027 introduce a new carbon border adjustment mechanism, called UK CBAM, that will affect manufacturing businesses importing certain goods into the country.

UK CBAM will effectively be a tax on imported goods with a high carbon production footprint designed to eliminate what is called ‘carbon leakage’ that undermines efforts by the UK government to limit global warming.

Carbon leakage occurs when production is moved to other countries with differing levels of decarbonisation, pricing and regulation. Countries around the world are exploring similar carbon border taxes, with the EU’s CBAM scheme already operational. UK businesses importing items made from cement, iron, steel, fertilisers and electricity supplies into the EU on the Delivery Duty Paid (DDP) terms should now be reporting.

UK CBAM will apply to aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel sectors. It has been largely welcomed by manufacturing businesses as it will create a level playing field ensuring UK businesses are not undercut by cheaper products from countries with less stringent environmental protections.

Details on how the scheme will operate will be put out for consultation in 2024.

More on this at our Customs Update workshops in February – book your place.

Changes to VAT on children’s clothing and reusable sanitary products

A Private Members Bill looks to amend the VAT legislation to extend the definition of children’s clothing to include children up to 18, to better reflect the growing size of today’s teenagers. It also looks to lift the restrictions on what is classified as school uniform to include items of clothing that do not necessarily carry a school badge or logo.

The legislation is currently working its way through Parliament and is expected to be passed into law in April 2024.

Additionally, reusable sanatory products are now (from 1 January 2024) zero rated for VAT purposes.

Spring Budget – 6 March 2024

As the Conservative government look for re-election all eyes will be on the Spring Budget, set for 6 March 2024. Whilst many measures outlined may not materialise they will certainly provide much food for thought and will be closely examined by voters. We should not be surprised too if other political parties set out their fiscal stalls in an attempt to woo voters.

As always, if you would like to discuss any of the changes outlined in this article, please speak to your usual Hillier Hopkins adviser or drop us a line at hi@hhllp.co.uk and we will put you in touch with an expert who can help.

We wish you all a prosperous and successful 2024.