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What to expect in 2024: Predictions and changes in accounting

8th Jan 2024
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2024 is well underway, and it’s a year that the landscape of accountancy in the UK will continue to evolve. Shaped by regulatory changes, technological advancements, and shifts in economic and social environments, this year promises to be a pivotal one, presenting both challenges and opportunities for accountants. 

In this article, we will explore some of the key predictions and changes expected to influence the world of accountancy in 2024. From evolving tax laws to the rise of ESG reporting, we will delve into what the future holds for UK accountants. 

2024 accounting predictions, trends and what to expect 

Tax changes 

  • From 6th January 2024, the main rate of National Insurance Contributions (NICs) paid by employees has been reduced from 12% to 10%. 

  • From 6th April 2024, the main rate of NICs paid by those who are self-employed will be reduced from 9% to 8%. 

  • The pensions Lifetime Allowance will be abolished.  

  • The Basis Period Reforms will be introduced, representing a significant change for self-employed individuals and partnerships. Instead of using an accounting period end, these entities will now be taxed on the profits made during the tax year. 

  • From April 2024, the Capital Gains Tax allowance will be reduced to £3,000 for individuals, and to £1,500 for trustees. 

  • From 1st April 2024, both the National Living Wage (NLW) and the National Minimum Wage (NMW) will increase. The NLW rate will increase to £11.44 per hour, and the NMW will increase to £8.60 for 18-20 year olds, £6.40 for 16-18 year olds and apprentices, and £9.99 when accommodation is being provided by the employer. 

Policy developments 

  • 2024 was supposed to be the year we saw Making Tax Digital (MTD) expand to include Income Tax Self Assessment (ITSA) for self-employed individuals and landlords. Although it's been delayed until 2026, we may see some progress on the next iteration of MTD this year. 

R&D tax relief 

Technological advancements 

  • Artificial Intelligence (AI) is poised to have a significant impact on the accounting industry in 2024, with predictions suggesting that it will be increasingly adopted for tasks such as data extraction and automated forecasting. This could free up time so accountants can focus on more complex, value-added activities that require human insight and expertise. 

  • Blockchain technology is also expected to grow within the accounting sector. Its ability to provide secure, transparent transactions could revolutionise areas such as auditing and financial reporting. 

  • The rise of agile accounting, which uses technology to enable real-time financial information and more flexible working practices, is another trend to watch. 

Economic outlook 

  • PwC has unveiled its economic forecast for 2024, offering a more optimistic perspective on the economy as the UK begins to recover from the challenging years following the pandemic. 

Anti-Money Laundering 

  • 2024 is set to be a pivotal year for both AML and accounting sectors in the UK, with a clear emphasis on increased regulation, technological advancement, and proactive measures against financial crime. Join our upcoming webinar, with special guest from Veriphy, where we’ll cover the basics of AML, including best practices for accounting firms, and tools to support your AML processes. 

ESG Reporting 

  • More accountants are expected to get involved in Environmental, Social, and Governance (ESG) reporting as businesses increasingly seek to demonstrate their sustainability efforts. 

Embracing the future 

The year 2024 promises to be a transformative period for accounting, bringing both challenges and opportunities. By staying informed and adaptable, accountants can leverage these upcoming changes to drive growth, enhance efficiency, and continue providing invaluable services in an evolving economic landscape. 

Bright

 

 

Written by: Elaine Carroll | Bright

 

 

 

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