13th March 2024
On Wednesday 6th March 2024, the Chancellor of the Exchequer, Jeremy Hunt, delivered the Spring Budget 2024. This was the last Budget to be delivered by the UK Government before the next general election, which is expected to take place later in 2024.
Jeremy’s Budget speech saw the announcement of adjustments to existing taxes as well as some new taxes. We have rounded up the key points we believe are worth noting:
PERSONAL TAX
National Insurance contributions (NICs) – from 6 April 2024 the government has announced a cut to the main rate of Class 1 employee NICs from 10% to 8%. Class 4 self-employed NICs will be cut by a further 2 pence taking this to 6%. Alongside these cuts, the government announced that it will consult on Class 2 NICs abolition later this year.
Tax rules for non-UK domiciled individuals – the current payment basis of taxation will be abolished for UK resident non-domiciled individuals as from 6 April 2025. This will be replaced with a new 4-year foreign income and gains (FIG) regime for individuals who become a UK tax resident after a period of 10 years of non-UK tax residence.
High Income Child Benefit Charge (HICBC) – from the 6 April 2024, the government will raise the HICBC income threshold from £50,000 to £60,000, and the reduction will be extended up to £80,000. The government intends to move to a system based on household rather than individual income by April 2026.
Capital Gains Tax (CGT) – the government will establish to reduce the higher CGT rate for residential property disposals from 28% to 24%. The change will take effect for disposals that take place on or after 6 April 2024. The lower rate of 18% will remain unchanged.
Abolition of Furnished Holiday Lettings – From April 2025, the government will cancel the current rules for Furnished Holiday Lettings (FHL) for individuals and corporates. Draft legislation will be published in due course.
UK Individual Saving Account (ISA) – the government intends to introduce a UK ISA with a new £5,000 allowance, in addition to the existing ISA allowance, and has launched a consultation on its implementation.
Improving Payment Options for Income Tax Self-Assessment (ITSA) – the government will improve and simplify HMRC’s digital services to support Income Tax Self-Assessment taxpayers seeking to pay tax in instalments.
BUSINESS TAX
The government has announced measures related to tax reliefs which include:
- New permanent rates of relief (40% and 45%) for theatre, orchestra, museums, and galleries exhibition tax.
- Additional support for independent film through a new UK Independent Film Tax Credit at a rate of 53% for films with budgets under £15 million that meet the conditions of a new British Film Institute test.
- Granting a 5% increase in tax relief for UK visual effects costs in film and high-end TV, under the Audio-Visual Expenditure Credit (AVEC).
- Establishing an expert advisory panel at HMRC to support the administration of research and development (R&D) tax reliefs.
EXCISE AND DUTIES
The government has announced a number of VAT related measures including:
- From 1 April 2024, increasing the VAT threshold to £90,000, and the level at which a business can apply for de-registration will increase from £83,000 up to £88,000.
- following its commitment in Autumn Statement 2023, the government will consult in April 2024 on the VAT implications for the private hire vehicle sector.
Vaping Duty – the government will introduce a new duty on vaping products in October 2026. A consultation has been launched on the detailed implementation of the duty.
Stamp Duty Land Tax (SDLT) – a range of SDLT measure have been announced including:
- Extending First Time Buyers’ Relief to individuals who use nominee and bare trust arrangements when buying a new lease over a dwelling that they intend to use as their main or only residence.
- the abolition of Multiple Dwellings Relief, a bulk purchase relief within the SDLT rules available on the purchase of two or more dwellings. The government will engage with the agricultural industry to determine if there are any particular impacts for the sector that should be considered further.
For further information or any queries, please contact us on 01903 300230.