Jeremy Hunt, the Chancellor of the Exchequer, presented the Spring Budget statement on 6 March 2024.
The Budget was his last Budget statement before the forthcoming general election and included some sweeping personal tax changes including the abolition of Furnished Holiday Let tax status, changes to the Child Benefit Tax Charge and changes affecting those individuals coming to the UK and looking to claim the remittance basis of taxation.
Below is a commentary on the main tax provisions announced.
The threshold at which child benefit is clawed back will increase from £50,000 to £60,000. From 2024/25, the clawback will be 1% for every £200 of additional income over the £60,000 threshold, this means that child benefit will not be lost entirely until income hits £80,000.
Under the current regime Child Benefit is clawed back at 1% for every £100 that income exceeds the threshold of £50,000 meaning the full child benefit is lost when income exceeds £60,000. These rules are based on the income of the higher earner in the household.
A possible move to a household income basis for assessment of child benefit tax charge has also been announced.
From April 2025 Furnished Holiday Let (FHL) status will be removed, meaning the tax benefits of meeting the current FHL conditions will no longer be available. Unlike residential lets, FHLs benefit from the following tax reliefs:
Those potentially looking to sell a FHL in the near future may consider doing that before the changes come into effect so as to potentially benefit from the capital gains tax reliefs. Tax advice around this is essential.
From 6 April 2025, new rules will be introduced for Non-Dom Remittance Basis. Under the proposed changes individuals who have been non-UK resident for 10 years will be exempt from UK tax on foreign income and gains arising in the first four years of residence, and they will be able to remit those income and gains to the UK without charge in that period. After this period the individual will be liable to UK tax on their worldwide income and gain.
Non-doms who are already resident in the UK will become taxable on their foreign income and gains in full, with effect from 5 April 2025. This is unless they have become resident within the preceding four years, in which case they can also benefit from the reformed rules for the remainder of that four-year period.
There will be transitional rules for those already claiming remittance basis:
From 6 April 2024 the main rate of Class 1 NIC for employees and Class 4 NIC for self-employed persons will reduce:
The government will also consult on how it will abolish Class 2 NIC for self-employed persons.
The higher rate of CGT for residential property gains will be reduced from 28% to 24% with effect from 6 April 2024. The lower rate will remain at 18%.
The Government have announced that from 1 April 2024 the VAT registration threshold will increase from taxable turnover of £85,000 to £90,000. This threshold applies to:
In line with this, the VAT taxable turnover level required to cancel a registration increases from £83,000 to £88,000.
If you would like to discuss any of the changes outlined above, please call your usual contact at Corrigan or email pete.edwards@corrigan.co.uk.
Our broad client base includes technology start-ups, business owners, international groups and non-profit making organisations. Whether you're an entrepreneur who needs advice with a new venture, an established business looking to make some changes, or a not-for-profit organisation seeking a more engaged accountant, we are here for you.
We see ourselves as an integral part of the businesses and larger communities which we serve, playing our part in a responsible and ethical way. This community ethos is woven into the fabric of Corrigan – ours is a small team of skilled and motivated accountants, building relationships at the regional, national and global level.
We're passionate about what we do. You'll find that we are as driven as you when it comes to striving for the best. Every service is tailored to meet your needs, offering you innovative and pragmatic solutions to whatever challenges you face.
Talk to us – we'd love to collaborate with you.