We have recently filed all of our members’ 2025 annual confirmation statements and ‘Declaration of Compliance’ with Companies House and Lloyd’s, respectively.
We wish to remind you, if you are considering making any changes to the structure of your underwriting vehicle, such as the addition of new directors/shareholders/members, or changes to companies or trusts that may be connected to the vehicle (for example changes to the shareholders or trustees), you must contact us before any such changes are made in order that we may arrange an application to Lloyd’s for their approval.
Lloyd’s have specific rules regarding the structure of a vehicle, and it may not be possible to make a change. Failure to obtain this pre-approval will result in Lloyd’s applying a fine and even the requirement to unwind any change made.
For those clients with money market accounts, HSBC have informed us that they will not be renewing the accounts when they reach their expiry date. All money market accounts will expire by June 2025, whereby the funds will then be paid back to your LLV account. We are in communication with HSBC with regards to an alternative offering and will update you once HSBC have provided further details. Please contact us should you require any further information.
Please also note that the HSBC interest rates on the client accounts are due to increase and will fluctuate month to month. For further details, please refer to the Alpha monthly bulletins.
As has been widely reported, significant changes were announced in the 2024 Autumn Budget to Business Property Relief. Under existing rules, Lloyd’s underwriting qualifies for business property relief, which has historically made the IHT bill on Lloyd’s Underwriting £nil. The 30 October 2024 budget proposes changes to that, whilst still lower than the 40% rate attracted for listed investments or property investments, inheritance tax will now be charged at 20% above an individual’s first £1m of BPR assets. The IHT changes are due to come in from April 2026.
Another impact on inheritance tax is from April 2027 pensions will start to be included in the individual’s estate taking that pot from a tax rate of 0% to 40%.
The government has not yet provided legislation, so the above guidance is still not final. We will continue to review the position.
For employers from April 2025, the starting threshold at which National Insurance contributions are payable in employee salaries reduces to £5,000. In addition, from the same date, the employer rate increases to 15% from 13.8%. The Employer’s Employment Allowance does however increase slightly, to £10,500 per annum, and increase from £5,000. The eligibility cap of £100,000 of employer contributions has also been removed.
The tax rates for non-savings, savings and dividend income all remained the same from 6 April 2024. However, as a reminder, the government announced in the 2024 Spring Statement that the Class 1 and Class 4 National Insurance rates would reduce from 6 April 2024. For Class 1, the main rate was cut from 10% to 8% and for Class 4 the rate was reduced from 9% to 6%. These rates have been maintained.
The dividend allowance remains at just £500 per annum.
As a reminder, there was a significant change to corporation tax rates, which took effect from 1 April 2023.
From this date, the corporation tax rates are as follows:
In addition, when considering profit levels, associated companies are also brought back into consideration.
Individuals are entitled to an annual exemption against capital gains arising on the disposal of qualifying assets each year. The annual amount for the tax year ending 5 April 2025 is £3,000. The capital gains tax reporting threshold, for instances where disposals occur but there is no taxable gain, is now set at £50,000 per annum. For total proceeds received in excess of this, even if no taxable gains arise, the disposals must still be reported.
There is also a change in the rate for business asset disposal relief coming into effect from April 2025. Should you wish to sell your vehicle out of personal ownership, the gain will now be charged at 14%, up from 10%, on the first £1m of qualifying gains. This increases further to 18% in April 2026. The rate after the first £1m has also increased from 20% to 24%.
As a reminder, the government have announced that from 6 April 2024, self-employed individuals and partners in trading partnerships will be required to change their accounting periods to either years ended 31 March or 5 April. However, Lloyd’s requires underwriters to run their accounting periods for years ending 31 December. The government have now confirmed that this legislation will not apply to Lloyd’s income.
For the tax years ending 5 April 2023 onwards, the loss carry-back rules have reverted back to only being able to carry back losses one year. These loss claims are still subject to the general loss cap rules for income tax purposes, which we would be happy to discuss with you if necessary. These rules apply to both loss claims and interest relief deductions, and to all business types.
The information in this update has been provided to us by Duncan & Toplis. Should you require any advice in regards to tax matters, please contact us.
