| Image Credits: Autumn 2024 Budget

The UK has announced it’s Autumn 2024 Budget, named “Fixing the Foundations to Deliver Change,” with the following highlights. 

• Ending Preferential Treatment of Carried Interest: The government is closing loopholes related to carried interest to create a fairer tax system.
• Transition to a Residence-Based Tax System: The non-dom tax regime will be replaced with a residence-based system, ensuring everyone living in the UK pays taxes here.
• Increase in Stamp Duty Land Tax for Additional Dwellings: The Higher Rates for Additional Dwellings will rise from 3% to 5% for second homes, buy-to-let properties, and corporate residential purchases, effective from October 31, 2024.
• Increased Energy Profits Levy (EPL): The EPL rate for oil and gas companies will increase from 35% to 38%, with the removal of the 29% investment allowance, and the levy will be extended until March 2030.
• Maintenance of 100% First-Year Allowances: The government will retain the 100% first-year allowances in the EPL while planning a consultation in early 2025 regarding adjustments to the oil and gas tax regime in response to price shocks after the EPL ends.
• VAT on Private School Fees: The government will charge VAT on private school fees to support funding for education.
• Removal of Business Rates Charitable Relief: Charitable relief on business rates in England will be eliminated as part of funding for government priorities.
• Recruitment of Additional Compliance Staff: The government is hiring 5,000 new compliance staff for HMRC, with the first 200 starting training in November.
• Investment in IT and Data Systems: Funding will be allocated to modernize HMRC's IT and data systems to enhance productivity and improve taxpayer experiences.
• Legislation to Close Company Car Tax Loopholes: The government will legislate against contrived ownership schemes related to company car tax.
• Increased Interest Rates on Overdue Tax Debts: To encourage timely tax payments, the interest rate on overdue tax debts will be increased.
• Stronger Action Against Tax Fraud: There will be an expansion of HMRC's criminal investigation efforts to tackle egregious tax fraud, along with measures to prevent abuses in non-compliant umbrella companies.

TAX COMMITMENTS

• No Increase in Income Tax or National Insurance: The government has committed to maintaining the current rates for basic, higher, and additional income tax, as well as National Insurance contributions and VAT.
• Uprating of Personal Tax Thresholds: The freeze on income tax and National Insurance thresholds will not continue. From April 2028, these personal tax thresholds will be adjusted in line with inflation.
• Fuel Duty Freeze: To support families and businesses amidst high living costs, fuel duty will remain frozen for one year. The existing 5p cut will be extended for another 12 months, and a planned inflation-related increase for 2025-26 will be cancelled. This move will save the average car driver £59 in 2025-26.
• Fuel Price Transparency: In response to recommendations from the Competition and Markets Authority, the government will implement the Fuel Finder scheme by the end of 2025. This open data initiative will improve competition in the road fuels market, potentially reducing pump prices by 1-6p per litre.

SIMPLIFICATION OF TAX POLICY

• Stable Tax System: The government recognizes the importance of a predictable tax system for sustainable economic growth, providing businesses the stability needed for long-term investment.
• Engagement with Stakeholders: Over the coming months, the government will engage with stakeholders to gather feedback on the tax policy-making process, aiming to identify areas for improvement.
• Commitment to a Single Major Fiscal Event: The government is committed to simplifying the tax system and will focus on three strategic priorities for HMRC: closing the tax gap, modernization, and improving customer service.
• Upcoming Measures in Spring 2025: A package of measures aimed at simplifying tax administration and enhancing customer experience, particularly for small businesses, will be announced.

HERE IS THE DETAILED LIST OF KEY CHANGES ANNOUNCED AS:

I. TRANSITION TO A FAIRER TAX SYSTEM

• Increase in Capital Gains Tax (CGT): The government will raise CGT rates from 10% to 18% (lower rate) and from 20% to 24% (higher rate), effective October 30, 2024. These new rates will align with the residential property rates.
• Phased Increases for Reliefs: Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) rates will gradually increase to 14% by April 2025 and will match the new lower CGT rate of 18% by April 2026.
• Inheritance Tax Reform: The government acknowledges that most estates currently pay no inheritance tax and aims to maintain this while ensuring that wealthier estates contribute more. The current inheritance tax thresholds will be frozen until April 2028 and extended for an additional two years until April 2030.
• Reform of Agricultural and Business Property Relief: From April 2026, the government will reform these reliefs, maintaining 100% relief for the first £1 million of combined agricultural and business assets, with a 50% relief thereafter. Business property relief will be reduced to 50% for shares that are “not listed” on recognized stock exchanges.
• Inheritance Tax on Pensions: Starting April 2027, unspent pension pots will be brought into the scope of inheritance tax, affecting approximately 8% of estates annually.

II. HEALTH AND PUBLIC WELL-BEING INITIATIVES

• Tobacco Duty Renewal: The Tobacco Duty escalator will be renewed at RPI + 2% for the remainder of this Parliament. A further 10% increase on hand-rolling tobacco duty will be implemented this year.
• Introduction of Vaping Products Duty: A new duty of £2.20 per 10ml of vaping liquid will take effect from October 1, 2026, alongside a corresponding increase in Tobacco Duty to encourage switching from tobacco to vaping.
• Soft Drinks Industry Levy: The government will increase the Soft Drinks Industry Levy to incentivize manufacturers to reduce sugar content. A review of current sugar thresholds and exemptions for milk-based drinks will also be conducted.
• Alcohol Duty Adjustment: While cutting duty on draught products, the government will increase non-draught alcohol duty in line with RPI to address rising alcohol-related deaths and economic inactivity. Most drinks in pubs will remain unaffected.
• Air Passenger Duty (APD) Increase: APD rates will be adjusted for inflation, resulting in a £2 increase for short-haul economy class flights. The rate for larger private jets will increase by 50%, with consultations on extending this rate to all private jets.

III. TAX SYSTEM REFORMS

• Domicile Status Replacement: The government will replace the domicile concept with a new residence-based tax regime starting April 6, 2025, eliminating the use of offshore trusts for Inheritance Tax avoidance and cancelling the planned 50% tax reduction for foreign income.
• Reform of Carried Interest Taxation: From April 2026, carried interest will be fully taxed under the Income Tax framework, with CGT rates increasing to 32% from April 2025 to ensure fairer taxation for fund management executives.
• Stamp Duty Land Tax Changes: The Higher Rates for Additional Dwellings will increase from 3% to 5% starting October 31, 2024, affecting second homes, buy-to-let properties, and corporate purchases, with an estimated 130,000 additional transactions expected over five years.
• Energy Profits Levy (EPL) Changes: The EPL rate will increase from 35% to 38%, the 29% investment allowance will be removed, and the levy will be extended until March 31, 2030, to ensure oil and gas companies contribute to the energy transition.
• Decarbonisation Incentives: 100% first-year capital allowances will remain within the EPL, and a decarbonisation allowance will be maintained at 66% to encourage investment in cleaner technologies.
• Long-Term Taxation Certainty for Oil and Gas: A consultation will be published in early 2025 regarding taxation responses to price shocks after the EPL ends in 2030, along with new environmental guidance for assessing emissions from oil and gas projects.

IV. EDUCATION FUNDING INITIATIVES

• Introduction of VAT on Private Education Services: A 20% VAT on fees charged by private schools will be implemented from January 1, 2025, along with the removal of business rates charitable relief for private schools in England starting April 2025. This is expected to raise £1.8 billion annually by 2029-30.
• Support for Special Educational Needs: Local authorities and devolved governments will be compensated for VAT incurred on private school fees for pupils with special educational needs who require such educational provisions.

V. TRADE STRATEGY

• Publication of Trade Strategy: The government will release a Trade Strategy in 2025 to reaffirm the UK’s commitment to free and open trade, aligning with the Industrial Strategy and Net Zero goals.
• Cooperation with the EU: The government aims to strengthen cooperation with the European Union on issues related to the economy, energy, security, and resilience, with active engagement from businesses and stakeholders.
• Use of Free Trade Agreements (FTAs): FTAs are identified as a vital tool for driving economic growth. The government is resuming talks with the Gulf Cooperation Council as part of its FTA negotiations.
• Support for Critical Minerals Supply: UK Export Finance (UKEF) will extend financial support to UK companies involved in supplying critical minerals for high-growth sectors like electric vehicle battery production, clean growth, aerospace, and defence, contributing to Net Zero objectives and supply chain resilience.

VI. HM REVENUE AND CUSTOMS (HMRC) FUNDING

• Funding Overview: The total Departmental Expenditure Limit (DEL) funding for HMRC will reach £6.7 billion in 2025-26, reflecting an average annual real-terms growth rate of 4.5% from 2023-24 to 2025-26.
• Tax Gap Closure Measures: The government plans to raise an additional £6.5 billion in revenue by 2029-30 through enhanced measures to close the tax gap.
• Customer Service Improvements: Increased funding aims to improve HMRC's customer service, targeting an 85% answer rate for phone calls where customers want to speak to an advisor.
• Compliance Staff Recruitment: An investment of £1.4 billion over five years will enable HMRC to hire 5,000 additional compliance staff, with the first 200 expected to start in November.
• Digital Transformation Roadmap: A roadmap will be published in spring 2025 to guide HMRC's transformation into a digital-first organization, enhancing internal systems and customer engagement through initiatives like the HMRC App.
• Prioritization of Tax Gap Closure and Compliance: The funding settlement emphasizes closing the tax gap and delivering an extensive package of compliance measures, marking a significant shift in the government's approach to tax administration.

VII. CLOSING THE TAX GAP

• Investment in Compliance Staff: The government will allocate £1.4 billion over five years to hire an additional 5,000 HMRC compliance staff, projected to generate £2.7 billion annually in extra revenue by 2029-30.
• Investment in Debt Management Staff: An investment of £262 million over five years will fund 1,800 debt management staff, with an expected annual revenue increase of £2 billion by 2029-30.
• Modernizing IT Systems: £154 million will be invested to modernize HMRC's debt management case system.
• Credit Reference Agency Data: The government will invest £12 million to acquire credit reference data, enhancing HMRC's ability to target debt collection efforts.
• HMRC App Modernization: £16 million will be allocated to update the HMRC app, allowing Self Assessment taxpayers to make voluntary advance payments in installments.
• Digitalization of Inheritance Tax: £52 million will be invested to digitalize the inheritance tax service starting from 2027-28.
• ISA Reporting Requirements: Mandatory digital reporting for Individual Savings Account (ISA) managers will begin on 6 April 2027.
• Pre-populating Self Assessment Returns: An investment of £4 million will enable HMRC to pre-populate Self Assessment tax returns with Child Benefit data for accurate reporting of the High Income Child Benefit Charge (HIBC).
• Mandatory Reporting of Benefits in Kind: Starting April 2026, reporting benefits in kind via payroll software will be mandatory, including income tax and Class 1A National Insurance contributions.
• E-invoicing Consultation: A consultation on establishing e-invoicing standards will be published in early 2025.
• Making Tax Digital for Income Tax: The rollout of Making Tax Digital for income tax Self Assessment will expand to those with incomes over £20,000 by the end of this Parliament.
• Tax Adviser Registration Modernization: £36 million will be invested to modernize HMRC's tax adviser registration services, mandating registration for tax advisers interacting with HMRC from April 2026.
• Advanced Electronic Signatures: From 6 April 2025, tax advisers will be required to provide Advanced Electronic Signatures for specified income tax repayment claims.
• Strengthening Regulatory Framework: The government is considering options to enhance the regulatory framework for tax advice following consultations on raising standards in the market.
• Tax Adviser Non-Compliance: A consultation will be published in early 2025 on options to enhance HMRC's powers against tax advisers facilitating non-compliance.
• Tackling Umbrella Company Market Non-Compliance: From April 2026, recruitment agencies will be responsible for accounting for PAYE on payments made to workers via umbrella companies, aiming to protect workers from unexpected tax liabilities.
• Changes to Late Payment Interest Rates: The late payment interest rate on unpaid tax liabilities will increase by 1.5 percentage points from 6 April 2025.
• Ending Contrived Car Ownership Schemes: Draft legislation will address loopholes in car ownership arrangements that allow tax avoidance, effective from 6 April 2026.
• Charity Compliance Measures: New legislation will prevent abuse of charity tax rules, effective from April 2026.
• Changes to LLP Liquidation Tax Rules: Tax treatment for capital gains during the liquidation of Limited Liability Partnerships will change from 30 October 2024 to close avoidance routes.
• Close Company Loans to Shareholders: Legislation will be introduced to prevent untaxed fund extraction by shareholders from close companies, effective from 30 October 2024.
• Overseas Pension Transfers: The exclusion from the Overseas Transfer Charge for transfers to certain pension schemes will be removed from 30 October 2024.
• Tackling Rogue Company Directors: Increased collaboration between HMRC, Companies House, and the Insolvency Service to address tax evasion through corporate insolvency schemes.
• Countering Tax Fraud: Expansion of HMRC's capabilities to combat high-value tax fraud.
• Rewards for Informants: The scheme for rewarding informants reporting tax fraud will be strengthened.
• Tackling Tax Avoidance Promoters: A consultation will be published in early 2025 to address promoters of marketed tax avoidance.
• Tackling Offshore Non-Compliance: The government is increasing resources and compliance activities to address serious offshore non-compliance, particularly focusing on wealthy individuals, intermediaries, and corporations that engage in fraud.
• Simplification of Offshore Interest Taxation: A consultation document will be published to address the challenges from the mismatch in reporting offshore interest, which is currently based on a calendar year rather than the UK tax year. The consultation will explore potential changes to align the taxation of non-UK interest with the tax year ending on December 31.
• Cryptoasset Reporting Framework (CARF): The government will extend CARF reporting requirements to UK users and legislate in the Finance Bill 2024-25. A summary of responses to the consultation on CARF and amendments to the Common Reporting Standard will be published alongside draft regulations.
• Taxation of Employee Ownership and Benefit Trusts: Reforms will be introduced to the taxation of Employee Ownership Trusts and Employee Benefit Trusts to prevent abuse, ensuring that these regimes encourage employee ownership and reward employees. These changes will take effect from 30 October 2024.
• Hidden Economy and Tax Conditionality: A consultation will explore the possibility of making the renewal of certain public sector licenses contingent on applicants being appropriately registered for tax.
• Consultation on Tackling Tax Non-Compliance: The government is seeking input on reforming HMRC’s correction powers, potentially allowing HMRC to require taxpayers to self-correct mistakes.
• Response to HMRC Powers and Penalties Consultation: A summary of responses to the call for evidence on HMRC’s powers, penalties, and safeguards will be published, focusing on improving tax administration.
• Simplifying Tax Administration: The government plans to engage with stakeholders to introduce measures aimed at simplifying tax administration and enhancing customer experience in the spring of 2025.
• Utilizing Third-Party Data: A consultation will be published in early 2025 to modernize how HMRC acquires and uses third-party data, aiming to assist taxpayers in correctly reporting taxes from the outset.
• Requirements for Overseas Pension Schemes: From 6 April 2025, the conditions for Overseas Pension Schemes (OPS) and Recognised Overseas Pension Schemes (ROPS) in the European Economic Area (EEA) will align with those established outside the EEA.
• UK Resident Pension Scheme Administrators: Beginning 6 April 2026, scheme administrators of registered pension schemes will be required to be UK residents.

VIII. PERSONAL TAX MEASURES

Employer National Insurance Contributions (NICs):

• Rate Increase: Employer NICs will increase from 13.8% to 15% starting 6 April 2025.
• Secondary Threshold: The Secondary Threshold will be reduced from £9,100 to £5,000 per year from 6 April 2025 until 6 April 2028, after which it will be adjusted annually by the Consumer Price Index (CPI).
• Employment Allowance: The Employment Allowance will increase from £5,000 to £10,500, with the £100,000 threshold for eligibility removed, benefiting all eligible employers starting 6 April 2025.

Employer NICs Relief for Veterans:

• • The relief for employers hiring qualifying veterans will be extended for one more year, from 6 April 2025 to 5 April 2026, maintaining no employer NICs up to £50,270 for the first year of a veteran's civilian employment.

NICs Re-Rating for 2025-26:

• The Lower Earnings Limit (LEL) and Small Profits Threshold (SPT) will be increased by the September 2024 CPI rate of 1.7%.
  • LEL: £6,500 per annum (£125 per week).
  • SPT: £6,845 per annum.
• Class 2 NICs will be £3.50 per week, and Class 3 NICs will be £17.75 per week.

Changes for Non-UK Domiciled Individuals:

• The government will abolish the remittance basis of taxation and implement a residence-based regime effective from 6 April 2025. Under this new system, non-UK domiciled individuals will not pay UK tax on foreign income for the first four years of tax residency.
• Other measures include changes to Inheritance Tax (IHT) rules regarding offshore trusts and adjustments to Capital Gains Tax rules for remittance basis users.

Inheritance Tax Reforms:

• Unused Pension Funds: From 6 April 2027, unused pension funds and death benefits will be included in an individual's estate for IHT purposes.
• Agricultural Property Relief: Effective from 6 April 2025, relief will be extended to land under environmental management agreements.
• Inheritance Tax Reliefs: Starting 6 April 2026, reforms will maintain 100% relief for the first £1 million of combined agricultural and business property, with a 50% rate thereafter for certain quoted shares.
• Nil-Rate Bands: The current nil-rate bands will be fixed until 5 April 2030: £325,000 for the nil-rate band and £175,000 for the residence nil-rate band.

Uprating Reliefs and Allowances for 2025-26:

• Qualifying Care Relief, Married Couple’s Allowance, and Blind Person’s Allowance will be uprated by the September 2024 CPI of 1.7% from 6 April 2025.

Savings and Investment Accounts:

• ISAs: Annual subscription limits will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs, and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030.
• Starting Rate for Savings: Will be retained at £5,000 for 2025-26, allowing individuals with under £17,570 in employment or pension income to receive up to £5,000 of savings income tax-free.

Help to Save Scheme:

• The scheme will be extended until 5 April 2027, with eligibility expanded to all Universal Credit claimants in work starting 6 April 2025.

British ISA:

• The government will not proceed with the British ISA following mixed responses to the consultation.

Clarification of Statutory Neonatal Care Pay:

• The government will legislate in Finance Bill 2024-25 to clarify the income tax treatment of Statutory Neonatal Care Pay, ensuring it is subject to income tax.

Employment-Related Securities Changes:

• From 6 April 2025, employers must provide notices regarding deductions from salary under Share Incentive Plans that refer to statutory neonatal care pay.

Loan Charge Review:

• An independent review of the Loan Charge will be commissioned to ensure fairness for all taxpayers, with further details to be provided later.

IX. BUSINESS AND INTERNATIONAL TAX MEASURES

Capital Gains Tax Rates:

• Rate Increases:
  • Lower main rate will increase to 18% and higher main rate to 24% for disposals made on or after 30 October 2024.
  • Business Asset Disposal Relief and Investors’ Relief rates will rise to 14% from 6 April 2025, then to 18% from 6 April 2026.
• Lifetime Limit for Investors’ Relief: The lifetime limit will be reduced to £1 million for qualifying disposals on or after 30 October 2024.

Carried Interest Taxation Reform:

• From April 2026, all carried interest will be taxed under income tax rules, with a 72.5% multiplier on qualifying amounts.
• Interim measures include both Capital Gains Tax rates for carried interest rising to 32% from 6 April 2025.

VAT on Private School Fees:

• Effective 1 January 2025, all educational services from private schools will be subject to VAT at 20%, including boarding services.
• Compensation for VAT will be provided to local authorities funding special educational needs placements in private schools.

Business Rates:

• Charitable Rate Relief: Private schools in England will lose their eligibility for charitable rate relief from April 2025, with exceptions for schools focused on full-time education for pupils with specific needs.
• Retail, Hospitality and Leisure Relief: For 2025-26, eligible properties will receive 40% relief on business rates, capped at £110,000 per business.
• Multipliers: The small business multiplier will be frozen at 49.9p, while the standard multiplier will be adjusted to 55.5p based on the September 2024 CPI.
• Sectoral Multipliers: Plans are in place to introduce lower multipliers for Retail, Hospitality, and Leisure properties starting 2026-27.

Stamp Duty Land Tax (SDLT):

• Higher Rates on Additional Dwellings: From 31 October 2024, the surcharge will increase by 2 percentage points to 5%. The rate for corporate bodies purchasing dwellings over £500,000 will also rise from 15% to 17%.

Energy Profits Levy:

• Effective 1 November 2024, the levy rate will increase to 38%, and the investment allowance will be abolished. The decarbonisation allowance will be set at 66%. The levy will conclude on 31 March 2030.
• The government will consult on future taxation of oil and gas profits after the EPL ends.

Carbon Capture Usage and Storage:

• Legislation will provide tax relief for payments made into decommissioning funds for assets used in carbon capture, maintaining their tax treatment as if the assets were decommissioned.

Consultation on Scope 3 Emissions:

• A consultation will assess new guidelines for measuring end-use emissions from offshore oil and gas projects to support industry stability and investment.

Climate Change Levy (CCL) Rates:

• For 2026-27, the main rates for gas, electricity, and solid fuels will be adjusted according to the Retail Price Index (RPI), while the liquefied petroleum gas rate will remain frozen.

Carbon Price Support Rates:

• The rates will be maintained at £18 per tonne of CO2 for 2026-27.

Carbon Border Adjustment Mechanism (CBAM)

• Implementation: The UK will introduce a carbon border adjustment mechanism on 1 January 2027, targeting imports at risk of carbon leakage from sectors such as aluminium, cement, fertiliser, hydrogen, and iron & steel.
• Scope Changes: Products from the glass and ceramics sectors will not be included in the CBAM from 2027, contrary to earlier proposals.
• Registration Threshold: Set at £50,000, this threshold will ensure that over 99% of imported emissions fall under the CBAM while exempting over 80% of registrable businesses, predominantly affecting micro, small, and medium-sized enterprises.

Air Passenger Duty (APD)

Rate Increases for 2026-27:

• • Domestic economy class flights will see an increase of £1.
  • Short-haul economy flights will increase by £2.
  • Long-haul economy flights will increase by £12.
  • Higher rates for larger private jets will rise by 50%.
  • From 2027-28, all rates will be adjusted annually based on forecast RPI.

Fuel Duty Rates

2025-26: Fuel duty rates will be frozen, representing a tax cut worth £3 billion.

• • The temporary 5p reduction will be extended until 22 March 2026.

Company Car Tax (CCT)

2028-29 and 2029-30 Rates:

• • Incentives for electric vehicles will remain strong, with appropriate percentages for zero-emission and electric vehicles increasing by 2 percentage points each year, reaching an AP of 9% by 2029-30.
  • APs for hybrid vehicles will increase to align more closely with internal combustion engine vehicles.

Vehicle Excise Duty (VED)

2025-26 Rates: Standard VED rates for cars, vans, and motorcycles will be uprated according to the RPI starting 1 April 2025.

First Year Rates: Changes will strengthen incentives for zero-emission vehicles:

• • Zero-emission cars will have a first-year rate of £10 until 2029-30.
  • Rates for cars emitting 1-50 g/km of CO2 will rise to £110.
  • Rates for cars emitting 51 g/km and above will double.

Heavy Goods Vehicle (HGV) Taxes

• VED and Levy Rates: Both the HGV VED rates and the HGV Levy will be adjusted according to the RPI from 1 April 2025.

Additional Vehicle Charges

• Van and Car Fuel Benefit Charges: Both will be uprated by CPI from 6 April 2025.
• Treatment of Double Cab Pick-Up Vehicles: From 1 April 2025, these vehicles will be treated as cars for various tax purposes, affecting capital allowances and benefits in kind.

Environmental Initiatives

• Statutory Open Data Scheme for Road Fuels Prices: A requirement will be introduced for petrol stations to report fuel prices and availability changes within 30 minutes. The scheme aims for launch by the end of 2025.
• Plastic Packaging Tax (PPT): The PPT rate will be increased in line with CPI inflation for 2025-26 to encourage the use of recycled materials in packaging.

Competition and Markets Authority (CMA) Monitoring

The CMA will begin gathering information to monitor competition in the road fuels market, with powers commencing by January 2025.

Plastic Packaging Tax (PPT)

Mass Balance Approach: Businesses can use a mass balance approach to demonstrate recycled content in chemically recycled plastic, supporting investment in advanced chemical recycling technologies.

Landfill Tax

Rate Adjustments: The government will adjust Landfill Tax rates from 1 April 2025 to maintain incentives for sustainable waste management. Future rates will be announced at the fiscal event before their implementation.

Alcohol Duty

• Duty Cuts: The government will reduce alcohol duty rates on draught products below 8.5% ABV by 1.7%, resulting in a 1p reduction for an average pint.
• Support for Small Producers: Discounts for small producers of both draught and non-draught products will be increased, enhancing the value of Small Producer Relief.
• Implementation Date: Changes will take effect from 1 February 2025.
• Guest Beers Consultation: A consultation will be launched to ensure small brewers can retain and expand access to UK pubs.

Tobacco Duty

• Duty Escalator Renewal: The tobacco duty escalator will be renewed at RPI + 2% until the end of the current Parliament. The rate on hand-rolling tobacco will increase by 10%.
• Implementation Date: These changes will take effect from 6 PM on 30 October 2024.

Vaping Products Duty

New Excise Duty: A flat-rate excise duty of £2.20 per 10ml of vaping liquid will be introduced from 1 October 2026, with an equivalent one-off increase in tobacco duty.

Gaming Duty

Band Freezes: The Gross Gaming Yield bandings for gaming duty will be frozen from 1 April 2025 to 31 March 2026.

Film and Entertainment Tax Reliefs

• Audio-Visual Expenditure Credit: Enhanced rates of 39% for visual effects and 53% for independent films with budgets under £15 million will be available starting 1 April 2025.
• Theatre, Orchestra, and Museum Tax Relief: Rates will be set at 40% for non-touring productions and 45% for touring productions, effective 1 April 2025.

Research & Development Tax Reliefs

Improving Administration: The government will consult on expanding advance clearances for R&D reliefs in spring 2025.

Capital Allowances

• Green First Year Allowances: The 100% First Year Allowances for zero-emission cars and electric vehicle chargepoint investments will be extended until 31 March 2026 for corporation tax and 5 April 2026 for income tax.
• Exploration of Full Expensing: The government will consider extending full expensing to assets purchased for leasing.

Reserved Investor Fund

• Introduction of a New Investment Fund: The government is proceeding with the introduction of the Reserved Investor Fund, with minor tax rule changes related to Co-ownership Authorised Contractual Schemes expected to be implemented by the end of the tax year 2024-25.

Private Intermittent Securities (PISCES)

Exemption from Stamp Taxes: Transactions under the new PISCES market for trading private company shares will be exempt from Stamp Duty and Stamp Duty Reserve Tax.

Transfer Pricing Reforms

Consultation: The government will release a consultation in spring 2025 to reform the UK's transfer pricing rules, which may include:

• • Potential Removal of UK-to-UK Transfer Pricing: Exploring the possibility of abolishing transfer pricing rules for domestic transactions.
  • Lowering Exemption Thresholds: Considering reduced thresholds for medium-sized businesses while maintaining exemptions for small businesses.
  • Reporting Requirements: Introducing a mandate for multinationals to report certain cross-border related party transactions to HMRC.
  • Cost Contribution Arrangements Review: Assessing the treatment of cost contribution arrangements to ensure they encourage investment in the UK.

Advance Pricing Agreements: Technical amendments will be introduced in the Finance Bill 2024-25 to clarify that Advance Pricing Agreements are applicable to financing arrangements under transfer pricing rules.

• • Multinational Top-Up Tax: Undertaxed Profits Rule
  • Legislation: The government will legislate for the Undertaxed Profits Rule (UTPR) as part of the OECD Pillar 2 framework in the Finance Bill 2024-25, effective for accounting periods beginning on or after 31 December 2024.
  • Reform of ORIP Rules: The Offshore Receipts in Respect of Intangible Property (ORIP) rules will be repealed effective from 31 December 2024. This change is based on the view that the UTPR will more effectively address multinational tax-planning arrangements.

Corporate Tax Roadmap

Key Commitments:

• • Cap the Corporation Tax Rate at 25%.
  • Maintain the Small Profits Rate and marginal relief at current rates.
  • Retain key features such as Full Expensing, the Annual Investment Allowance, R&D relief rates, and the Patent Box.

Future Exploration: The Roadmap indicates a commitment to simplifying tax administration and developing a new process for advanced assurance for major projects.

Tariff Suspensions

Rollover of 2021 Tariff Suspensions: The government will extend tariff-free imports until June 2026 for various goods, including aluminum frames and food ingredients, to reduce costs for UK businesses.

Alternative Finance Tax Rules

Leveling the Playing Field: Amendments will be made to alternative finance tax rules to align tax consequences of alternative and conventional financing arrangements. These changes will be legislated in the Finance Bill 2024-25 and will take effect from 30 October 2024.

Annual Tax on Enveloped Dwellings (ATED)

Uplift in Chargeable Amounts: The annual chargeable amounts for ATED will increase by the September CPI figure of 1.7% for the 2025-2026 ATED chargeable period, implemented through a Treasury Order.

Public Sector Current Receipts (2025-26)

X. PROJECTED RECEIPTS: 

The total public sector current receipts are expected to be around £1,229 billion, broken down as follows:

• Income Tax: £329 billion
• National Insurance Contributions: £199 billion
• Excise Duties: £46 billion
• Corporation Tax: £105 billion
• VAT: £214 billion
• Business Rates: £34 billion
• Other Taxes: £128 billion
• Council Tax: £50 billion
• Other Non-Taxes: £125 billion

FOR A COMPLETE OVERVIEW, PLEASE REFER TO:

• Autumn Budget 2024 – HC 295