On 6 March, Chancellor Jeremy Hunt delivered the Spring Budget. Here's a summary of the key measures announced.
  • Class 1 National Insurance Contributions will be cut by a further 2% to 8% from 6 April 2024 for employed individuals.
  • The High Income Child Benefit Charge adjusted net income threshold will increase from £50,000 to £60,000 from 6 April 2024 and the rate of the charge will be halved for individuals with income between £60,000 and £80,000. Child Benefit payments will now need to be fully repaid for individuals with income of more than £80,000. The Government will consult on the threshold being based on household income by April 2026 rather than an individual’s income.
  • The current regime for the taxation of non-UK domiciled individuals will be replaced with a new residence-based regime to take effect from 6 April 2025. Individuals will be taxed on their foreign income and gains after an initial period of four tax years of UK residence. However, this four-year period of relief will only be available to those who were non-UK resident for ten consecutive tax years before taking up UK residence. There will be various transitional rules for existing non-UK domiciled individuals in the UK who may be affected by these changes.
  • It is intended that the inheritance tax regime for non-UK domiciled individuals will also move to a residence-based regime and the Government will consult on this.
  • Overseas Workday Relief will be available to certain employees in their first three tax years of UK tax residence for earnings from employment duties carried out overseas.
  • Agricultural property relief (APR) and woodlands relief will be restricted to property in the UK for inheritance tax purposes from 6 April 2024.
  • The scope of APR will be extended to cover certain types of environmental land management from 6 April 2025.
  • The Chancellor announced a reduction in Class 4 National Insurance Contributions for the self-employed to 6% from 6 April 2024.
  • Draft legislation is to be released for consultation on extending full expensing to leased assets. However, this policy will only be introduced when fiscal conditions allow.
R&D tax incentives for businesses
  • No further reforms to the R&D tax regime were announced today. However, an ‘expert advisory panel’ to support the administration of the regime was announced. This panel will provide industry insights and work with HMRC to improve guidance for the benefit of claimant companies. The upcoming consultation on standards in the tax advisory market will have an R&D tax focus.
  • The Chancellor announced the abolition of the Furnished Holiday Lettings tax regime from April 2025.
  • The higher rate of Capital Gains Tax on residential property sales will be reduced from 28% to 24% from 6 April 2024.
VAT and duties
  • From 1 April 2024, the VAT registration threshold will increase from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000. Both will be frozen at these levels.
  • The fuel duty freeze will remain in place for 2024-2025 and the 5p fuel duty cut will be extended until March 2025.
  • The alcohol duty freeze will be extended until 1 February 2025.
  • A new duty on vaping is to be introduced from October 2026, following a consultation process.
Stamp duty
  • From 6 March 2024, legislation will take effect to ensure that registered providers of social housing in England and Northern Ireland are not liable for Stamp Duty Land Tax (SDLT) when purchasing property with a public subsidy and public bodies will be exempt from the 15% anti-avoidance SDLT rate.
  • For transactions with an effective date on or after 1 June 2024, Multiple Dwellings Relief, a bulk purchase relief in the SDLT regime in England and Northern Ireland, will be abolished.
Environmental and energy
  • The Chancellor announced the extension of the sunset clause on the Energy Profits Levy to March 2029, however he committed to abolish it should prices fall to historic norms earlier than expected.
Creative sector
  • As part of measures worth over £1bn, increased tax incentives for high-end TV and film production (an additional 5% for UK visual effects costs under the AV Expenditure Credit and an exemption from the 80% cap on qualifying expenditure for UK visual effects costs), a 40% relief on gross business rates until 2034 for eligible film studios and a new tax credit of 53% for certain independent UK films were announced.
  • Orchestras, museums, galleries and theatres will benefit from a permanent 45% tax relief for touring productions (and all orchestra productions) and 40% relief for non-touring productions.
  • The Government intends to consult on a residence-based regime for inheritance tax (IHT).
  • The Government will consult on the new ‘UK ISA,’ which will provide an additional £5,000 allowance for tax-free investments in support of UK companies.
  • The Government will consult on how to raise standards in the tax advice market through a strengthened regulatory framework and registration.
  • A consultation will be published on the merits of a General Anti Avoidance Rule for business rates in England.
  • Consultation responses have been published regarding the reserved investor fund, the taxation of environmental land management and ecosystem service markets and the operational reforms to the Nationally Significant Infrastructure Project consenting process.
  • The Government will consult shortly on the types of expenditure that will be within the scope of the additional tax relief for visual effects costs in films and high-end TV.
  • The Government will launch a consultation on the impacts of the 2023 High Court ruling in Uber Britannia Ltd v Sefton MBC in April to ensure the ruling does not have adverse effects on the VAT treatment of private hire vehicles.
  • The Government will consult on the proposed Carbon Border Adjustment Mechanism, which is to take effect from 1 January 2027.
  • The Government has launched a consultation seeking views on the UK’s implementation of the Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard.
  • A consultation on the Government’s commitment to abolish Class 2 National Insurance Contributions will be launched later this year.
Avoidance and evasion
  • New measures aimed at closing the tax gap are expected to generate £4.5bn per annum by 2028/2029. This will include investment in HMRC’s compliance and debt collection activities.
  • An intention to close gaps in the tax transparency system that are due to financial technology crypto-asset developments was announced.
  • The Government intends to introduce measures to make it harder for ‘bad actors’ to promote harmful tax advice, and further steps to address abuse in the umbrella company market will be announced soon.
  • The Finance Bill will include provisions to prevent individuals using a company to bypass the Transfer of Assets Abroad anti-avoidance legislation. This measure is to take effect for income arising to a person abroad from 6 April 2024.