The Chancellor of the Exchequer, Jeremy Hunt, delivered his 2024 Budget on Wednesday 6 March. He said that the Budget “sticks to the plan by delivering lower taxes, better public services and more investment, while increasing size of economy by 0.2% in 2028-29 and meeting fiscal rules – taking the long-term decisions needed to build a brighter future.”
The majority of the key announcements had been widely trailed in advance of the formal announcements. These included the following tax-related points:
Business taxes
- The headline rates of corporation tax remain unchanged. The end date of the additional levy on oil and gas producers will be extended to 31 March 2029.
- The intention to extent the “full expensing” capital allowances regime to include leased assets was confirmed, with draft legislation to be published shortly, to be taken forward “when fiscal conditions allow”.
- Further reliefs will be introduced for the creative sector, including a higher rate of Audio-Visual Expenditure Credit for visual effects, a new Independent Film Tax Credit and orchestra and theatre tax reliefs being made permanent.
- A new consultation has been launched on the UK rules to implement the Cryptoasset Reporting Framework (CARF) and amendments to the Common Reporting Standard, with responses required by 29 May.
- An expert advisory panel will be established to support the administration of R&D tax reliefs, working with HMRC to review and update relevant guidance.
Personal taxes
- A 2% cut in the rate of National Insurance paid by employees on income up to £967 per week (from 10% to 8%) and by the self-employed (from 8% to 6%, with a cut from 9% already announced). The employer rate remains unchanged.
- The remittance basis of taxation available to individuals resident but not domiciled in the UK will be abolished from 6 April 2025. A new four-year foreign income and gains regime will be introduced for individuals becoming UK-resident, who will not pay UK tax on foreign income and gains arising in the first four tax years after becoming UK tax resident and will be able to bring these funds to the UK free from any additional charges. Various transitional rules to move to the new regime will be introduced.
- Overseas Workday Relief will be reformed, with eligible employees able to claim for the first three years of tax residence.
- The High Income Child Benefit Charge starting threshold will be increased to £60,000 and the taper rate will be halved, applying for incomes between £60,000 and £80,000, from the 2024-2025 tax year onward.
- A new “British ISA” will be introduced after consultation as a £5,000 additional allowance to existing ISA allowances to allow investment in UK equities.
- The Furnished Holiday Lets tax regime will be abolished from 6 April 2025.
- The scope of Agricultural Property Relief for Inheritance Tax will be extended from 6 April 2025 and the relief will not be limited to tenancies of at least eight years.
Property taxes
- Multiple Dwellings Relief (MDR) for Stamp Dity Land Tax (SDLT) will be abolished from 1 June 2024. MDR can still be claimed for contracts exchanged on or before 6 March 2024.
- The higher rate of Capital Gains Tax on residential property will be reduced from 28% to 24%, from 6 April 2024.
Indirect taxes and duties
- The VAT registration threshold will be increased from £85,000 p/a to £90,000 p/a, with effect from 1 April 2024. The deregistration threshold will increase from £83,000 p/a to £88,000 p/a.
- Announcements will be made at a later date in relation to the VAT Retail Export Scheme, after the Government has considered the findings of the Office for Budget Responsibility (OBR) alongside industry representations and broader data.
- Re-confirmation that a UK carbon border adjustment mechanism will be introduced rom 1 January 2027, applicable for relevant goods imported in the aluminium, cement, ceramics, fertiliser, glass, hydrogen, and iron and steel sectors.
- A one-off rise in air passenger duty for non-economy flights.
- No increase in fuel duty; the current temporary 5p cut will be extended.
- Alcohol duty frozen until February 2025.
- A new excise duty on vaping produces and a one-off increase in tobacco duty, taking effect from 1 October 2026.
Tax administration
- HMRC given more money to collect outstanding tax debts, budgeted to raise approximately £1 billion every year from 2025/26 to 2028/29.
- The sunset date for freeport special tax sites will be extended, to 30 September 2031 in England, and to 30 September 2034 in Scotland and Wales.
- Further details were announced of six Investment Zones, including Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, West Midlands and Tees.
More detail on these and other measures is set out in our briefing document here.