Freezes in both fuel and alcohol duty, a new duty on vaping and increased tobacco duty, and the abolition of stamp duty land tax multiple dwellings relief feature in this section together with the news of additional investment in HMRC to tackle collection of tax debt and a range of other measures.
The current levels of fuel will be maintained for a further 12 months via extending the temporary 5p fuel duty cut and cancelling the planned inflation-linked increase for 2024/25. Following a review, the government will maintain the difference between road fuel gas and diesel duty rates until 2032.
Alcohol duty is being frozen from 1 August 2024 until 1 February 2025. This extends the six-month freeze announced at Autumn Statement 2023 and will result in 2p less duty on an average pint of beer, 1p less duty on an average pint of cider, 10p less duty on an average bottle of wine, and 33p less duty on an average bottle of spirits than if the planned duty increases had gone ahead.
The government will introduce a new duty on vaping products from 1 October 2026, with registrations for the duty expected to open from 1 April 2026. The rates will be £1 per 10ml for nicotine free liquids, £2 per 10ml on liquids that contain 0.1-10.9 mg nicotine per ml, and £3 per 10ml on liquids that contain 11mg or more per ml. A 12-week consultation has been launched on the policy design and technical details. The government will also introduce a one-off tobacco duty increase of £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026.
From 1 June 2024, the government is abolishing stamp duty land tax (“SDLT”) Multiple Dwellings Relief (“MDR”). MDR is a bulk purchase relief where the rate of SDLT is normally determined by the total consideration given for land and it is currently available to any purchaser buying two or more dwellings in a single transaction, or linked transactions. It allows the purchaser to calculate the SDLT payable based on the average value of the dwellings purchased as opposed to their aggregate value.
Property transactions with contracts that were exchanged on or before 6 March 2024 will continue to benefit from the relief regardless of when they complete, as will any other purchases that are completed before 1 June 2024. The government will also engage with the agricultural industry to determine if there are any particular impacts that should be considered further.
Legislation will be updated to ensure that from 6 March 2024, registered providers of social housing in England and Northern Ireland are not liable for SDLT when purchasing property with a public subsidy and public bodies will be exempted from the 15 percent anti-avoidance rate of SDLT for high value residential properties.
From 6 March 2024, the rules for claiming SDLT first-time buyers’ relief will be amended so that individuals buying a leasehold residential property through a nominee or bare trustee will be able to claim the relief, including victims of domestic abuse.
The government is investing £140 million “to improve HMRC’s ability to manage tax debts.” The aim is to expand HMRC’s debt management capacity “to support both individual and business taxpayers out of debt faster and collect tax that is due.”
Air Passenger Duty (“APD”)
The 2025/26 APD rates for economy passengers will increase in line with forecast inflation. Rates for those flying premium economy, business and first class and for private jet passengers will also increase by forecast inflation and will be further adjusted for recent high inflation.
Landfill tax rates for the year 2025/26 will be adjusted to better reflect actual inflation and ensure that the tax continues to incentivise investment in more sustainable waste management infrastructure. The standard rate of landfill tax will increase to £126.15 per tonne and the lower rate will increase to £4.05 per tonne.
The government referenced the Office for Budget Responsibility’s recent review of the VAT Retail Export Scheme and specifically the original costing of the removal of tax-free shopping. The government will consider these findings alongside industry representations and broader data, and welcomes any further submissions in response to these findings.
The government will launch a consultation on the impacts of the July 2023 High Court decision in Uber Britannia Ltd v Sefton MBC next month. A range of viable options will be explored to ensure that this case’s ruling does not have any undue adverse effects on the private hire vehicle sector and its passengers. In this case, The High Court considered the regulation of Uber's business model outside of London, and specifically whether the private hire vehicle operator is acting as a principal when entering into a contractual obligation with the passenger to provide the journey. This in turn has potential VAT consequences in terms of whether the private hire vehicle operator is acting as a principal or an agent, and therefore may impact on the tax base on which VAT should be charged.
The Digital Markets, Competition, and Consumers Bill is introducing new protections for consumers who take out subscription contracts. The government will amend existing gift aid legislation so that charities can continue to claim gift aid while complying with these new protections. The government’s intention is that these amendments will be in place by the time the relevant provisions of the Bill come into force.
Crypto-Asset Reporting Framework
The government has launched a consultation which seeks views on how best to implement the Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard. As previously announced in November 2023, these changes will be made in time to ensure that information exchanges take place from 2027.
Transfer of Assets Abroad
The government will legislate in the Spring Finance Bill 2024 to ensure individuals cannot use a company to bypass this anti-avoidance legislation, Transfer of Assets Abroad, in order to avoid UK income tax. The changes will take effect for income arising to a person abroad from 6 April 2024.
The Umbrella Company Market
The government will provide an update on the recent consultation on tackling non-compliance in the umbrella company market at Tax Administration and Maintenance Day next month. In summer 2024 the government will also publish new guidance relevant to workers and other businesses who use umbrella companies.
Economic Crime Levy adjustment
From 1 April 2024, the rate at which entities with UK annual revenue greater than £1 billion, and which are regulated for Anti- Money Laundering purposes, will pay the Economic Crime (anti-money laundering) Levy will increase from £250,000 to £500,000 per annum.
Environmental land management and ecosystem service markets
Following consultation, the government will extend the existing scope of agricultural property relief from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, Devolved Administrations, public bodies, local authorities, or approved responsible bodies. The government will also establish a joint HM Treasury and HMRC working group with industry representatives to identify solutions that provide clarity on the tax treatment of ecosystem service markets.
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