Last week, the Chancellor made his 2024 Spring Budget speech, setting out the government’s plans. These include bringing forward a series of reforms to ensure the tax system is simple, fair and keeps pace with economic developments.
Personal Tax in the 2024 Spring Budget Speech
National Insurance contributions (NICs)
The government has announced a cut to the main rate of Class 1 employee NICs from 10% to 8% from 6 April 2024, and a further cut of 2 pence to the main rate of Class 4 self-employed NICs from 6 April 2024, 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
From 6 April 2025, the current remittance basis of taxation will be abolished for UK resident non-domiciled individuals. This will be replaced from 6 April 2025 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)
The government has announced it will raise the HICBC income threshold from £50,000 to £60,000 from 6 April 2024, and the taper 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, and will consult in due course
Capital Gains Tax (CGT)
The government will legislate 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
This is a big one!
The government will repeal the current rules for Furnished Holiday Lettings (FHL) for individuals and corporates from April 2025, and will publish draft legislation in due course
UK Individual Saving Account (ISA)
The government has announced that it 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 design and 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 in the 2024 Spring Budget Speech
Tax reliefs
New permanent rates of relief (40% and 45%) for theatre, orchestra and museums and galleries exhibition tax, and 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. In addition, the government is providing a 5% increase in tax relief for UK visual effects costs in film and high-end TV, under the Audio-Visual Expenditure Credit (AVEC)
Value Added Tax (VAT)
This is another big one!
The VAT threshold will increase to £90,000 from 1 April 2024, and the level at which a business can apply for de-registration will increase from £83,000 up to £88,000.
This hasn’t changed for many years.
Tackling the Tax Gap
The government has launched a consultation to seek views on how best to implement the Cryptoasset Reporting Framework and Amendments to the Common Reporting Standard
Agents and intermediaries
The government has published a consultation on 2 potential changes to raise standards in the tax advice market, including:
- strengthening the regulatory framework, by exploring a proposal to require tax advisers to join a professional body
- requiring tax advisers to register with HMRC if they wish to interact with HMRC on a client’s behalf. The government will also explore making it quicker and easier for tax advisers to register with HMRC
We think both of these would be a great idea.
Helping you with the 2024 Spring Budget measures
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