Balancing the recent news that the UK tipped into recession at the end of 2023 with calls from politicians in his own party to reduce taxes in what is most likely an election year, Chancellor Jeremy Hunt delivered the UK’s Spring Budget 2024 last Wednesday. According to the Chancellor, the main announcements centred around “more investment, more jobs, and lower taxes”. Read the Institute’s reaction to the Budget.
The VAT registration threshold will increase to £90,000 from April 2024 and full expensing which provides 100 percent capital allowances for investments in new plant and machinery by companies will be extended to leased assets, when affordable. The higher 28 percent rate of Capital Gains Tax on residential property disposals will be reduced to 24 percent from 6 April 2024. From April 2025 the remittance basis regime for non-UK domiciled individuals and the furnished holiday lets regime will both be abolished. However, the big ticket announcement was the 2 percent reduction in the rate of National Insurance Contributions for both employees and the self-employed, which will take effect from 6 April 2024.
According to the Chancellor’s speech, the Northern Ireland Executive will receive an additional £100 million under the Barnett Consequential (which compensates devolved administrations with funding where Budget measures do not apply UK-wide). And, as announced as part of the package to restore the Northern Ireland Executive, the government will establish an Enhanced Investment Zone in Northern Ireland using £150 million in funding, which will “be able to be used flexibly across spending and tax levers”. Details on the Northern Ireland Enhanced Investment Zone will be published “soon”. The government also committed £2 million “to boost global investment and trade opportunities for Northern Ireland.”
Members will also be interested to hear that HMRC’s long planned consultation on “Raising standards in the tax advice market” has been launched and essentially examines options to strengthen the tax agent regulatory framework, including requiring tax advisers to register with HMRC if they wish to interact with HMRC on a client’s behalf. The Institute will be responding to this consultation and engaging with members on this important issue.
The analysis in this and subsequent stories is based on the Spring Budget 2024 publications of HMRC and HM Treasury and specifically the main red book publication. The Spring Finance Bill 2024 is expected to be published later this week, in the meantime supporting documents are available, as is the Spring Budget 2024 overview of the tax legislation and rates. A further set of tax administration and maintenance announcements will also be made on “Tax Administration and Maintenance Day” on Thursday 18 April.
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