Definitely a pre election budget
Mary Tierney, Tax Director, BSC ARCS ACA CTA
Despite speaking for just over an hour, there was not an awful lot of tax content in the budget, and having gone through the HMRC publications, there is not a lot more to expand on.
There were however three key announcements that will be important to any tax payers falling in the following groups:
- Anyone who lets a holiday cottage – Find out more here
- Property developers/investors – Find out more here
- Non UK Domiciled individuals – Find out more here
Anyone falling in any of these groups will have found it an “interesting” budget.
Whilst the last point and changes to the non domicile rules have been on the cards for some time, the first two were more of a surprise.
What else is there?
Other announcements of note and publications made alongside the Chancellors speech were:
- Reduction in NIC for employees and self employed by 2% from 6 April 2024
- The income threshold at which HICBC starts to be charged from £50,000 to £60,000 from April 2024.
- In addition, the rate at which the HICBC is charged will also be halved from 1% of the Child Benefit payment for every additional £100 earnt above the threshold, to 1% for every £200. This means Child Benefit will not be withdrawn in full until individuals earn £80,000 or higher.
- A reduction in the higher rate of Capital Gains Tax for residential property gains from 28% to 24%. The change will take effect from 6 April 2024. The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.
- An amendment to the rules for claiming First-time Buyers’ Relief from Stamp Duty Land Tax where property is bought using a nominee or bare trust (primarily to assist victims of domestic abuse and preserve anonymity).
- The government will introduce legislation at Spring Finance Bill 2024 to restrict the scope of agricultural property relief and woodlands relief to property in the UK.
- Various extensions to reliefs for the creative industries.
- From 1 April 2024 the taxable turnover threshold which determines whether a person must be registered for VAT, will be increased from £85,000 to £90,000.
- The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £83,000 to £88,000
- Following digitisation of the DIY Housebuilders Scheme, the HMRC will have additional powers to request further evidential documentation in relation to a VAT DIY housebuilder’s claim.
- HMRC has published guidance to provide greater clarity of the tax deductibility of training costs for sole traders and the self-employed. The guidance clarifies that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are deductible costs when calculating the taxable profits of a business.
- A consultation both on options to strengthen the regulatory framework in the tax advice market, and on 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.
- Detail on the way that a points based penalty system will apply on the introduction of making tax digital and quarterly filing for rental and trading income with effect from 6 April 2026
We are holding a Budget Briefing event on Tuesday 12th March where our experts will give further insights into the budget and the potential impact for individuals and businesses. If you would like to attend, please fill in your details below.
