Spring Budget 2024

Scroll down for CIOT/LITRG Budget reactions

Key tax announcements are:

Personal taxes and duties:

• National Insurance cut by 2p from 10% to 8%, and for the self-employed from 8% to 6%
• Non-doms regime scrapped and replaced by a residency-based system from April 2025
• Child benefit threshold raised from £50,000 to £60,000 (with complete withdrawal at £80,000 rather than £60,000). Consultation on basing child benefit charge on household income from 2026
• Capital gains tax on property cut from 28% to 24%
• Furnished holiday lettings relief scrapped
• Abolishing the SDLT multiple dwellings relief
• Changes to SDLT First Time Buyers’ Relief to expand eligibility
• Fuel and alcohol duties frozen until 2025
• Increased Air Passenger Duty on business class flights
• New tax on vapes and tobacco duties increased from October 2026
• Reforming the ISA system to encourage more investment in UK assets

Business taxes:

• VAT registration threshold up to £90,000 effective from 1 April.
• Consultation on extending full expensing to leased assets
• Oil and gas company windfall tax extended until 2029.
• Creative industries tax reliefs made more generous
• HMRC will establish an expert advisory panel to support the administration of R&D tax relief

Tax administration and compliance:

• Consultation 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.
• Economic Crime (anti-money laundering) Levy increased
• Consultation on a “General Anti-Avoidance Rule” for business rates in England
• Government investing a further £140 million to improve HMRC’s ability to manage tax debts
• Legislation to ensure individuals cannot use a company to bypass Transfer of Assets Abroad anti-avoidance provisions
• The government is announcing metrics to measure progress against tax simplification.

To read the official documents relevant to the Spring Budget please click here.

CIOT and LITRG immediate reactions to key measures

Non-doms 

The CIOT said that moving from domicile to residence as the basis for taxing people who are internationally mobile “makes sense”, but criticised the government’s failure to consult ahead of announcing the change. The Institute warned that a four-year remittance basis window is a 'drastic reduction' from the current 15. (More)

Tax simplification and administration

CIOT has welcomed the announcement that a suite of tax simplification metrics will be introduced, including an estimate of the net change in cost to businesses of meeting tax obligations from tax measures. However the Institute is disappointed by the lack of further investment in HMRC to improve customer service. (More)

High income child benefit charge

The CIOT's Low Incomes Tax Reform Group (LITRG) has said the decision to increase the child benefit charge threshold will bring the scope of the charge closer to the original policy intent, but has cautioned that the plan for the charge to be based on joint household incomes by April 2026 may be complex, costly and difficult to achieve. (More)

Extension of full expensing 

CIOT has welcomed the announcement that the government will seek to extend full expensing to assets for leasing when fiscal conditions allow. However, the Institute would still like to see the government look at what is eligible for capital allowances more generally. (More)

VAT threshold increase

While this modest increase in the VAT threshold will simplify the position for some small businesses, there is nothing in the Budget to address any of the issues created by the UK’s high VAT threshold. CIOT would like to see HMRC consider how to encourage businesses nearing the VAT threshold to continue to grow, possibly by a smoothing mechanism or another simplification. (More)

Research and development (R&D) – expert advisory panel

CIOT has welcomed the announcement of an ‘expert advisory panel’ to support the administration of R&D tax reliefs. and hopes that the role of the panel will go wider and help with the training of caseworkers at HMRC. (More)

Furnished holiday lettings 

The case for scrapping the separate regime for furnished holiday lettings is a strong one. But while the change is a simplification, it may also increase uncertainty in this area, putting pressure on the boundary between whether a landlord has a passive investment or is conducting a ‘trade’, which has implications for their tax treatment. (More)

SDLT First-Time Buyers’ Relief

CIOT has welcomed the announcement that the rules for claiming 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. (More)

SDLT Multiple Dwellings Relief

The abolition of Multiple Dwellings Relief for SDLT is a good example of the tax policy review process working effectively. The government have evaluated the relief and decided it is ineffective. (More) 

CIOT Scottish response 

By cutting national insurance rather than income tax the Chancellor has avoided creating further divergence between Scotland and the rest of the UK. The announcement does nothing to address the anomaly that taxes Scots pay a higher marginal rate of tax on earnings between the Scottish and UK higher rate thresholds. (More)