The cost of living crisis is over?

With 10 million people of working age not actively seeking employment; this duo have always been clear that they want to make work pay!

The Chancellor repeated the message of low taxes means higher growth; higher wages and living standards by a higher skilled workforce. We take a look at the key announcements:

• Following the 2% reduction in January, a further reduction in the rate of employees National Insurance from 10% to 8% in 6 April 2024.
• Mirroring the employee reduction, an additional reduction in National Insurance for the self-employed from 8% to 6% from 6 April 2024.
• The higher rate of capital gains tax on residential property gains will be cut from 28% to 24% from 6 April 2024.
• The VAT registration threshold is set to be increased from £85,000 to £90,000.
• Full expensing relief for the likes of plant hire and vehicle leasing companies when fiscal conditions permit.
• An extension of the scope of agricultural property relief from Inheritance Tax in respect of environmental land management from 6 April 2025.
• The OBR forecasts inflation to fall to its 2% target in Q2 2024, let’s hope the Bank of England take note!

A controversial clawback mechanism that has caught numerous unsuspecting taxpayers resulting in owed taxes, interest and penalties. Today the Chancellor announced that the high income child benefit charge threshold will increase from £50k to £60k, with the level at which child benefit is fully repaid increasing to £80k, effective from 2024–25. The Government also announced the intention to assess on a household-basis rather than an individual by April 2026; consultations to follow!

Abolished!

• The furnished holiday lettings tax regime, which provides tax advantages for short-term furnished holiday properties, will be abolished from April 2025. An anti-forestalling rule will prevent a tax advantage through the use of unconditional contracts to obtain capital gains relief under the current FHL rules.
• The non-UK domiciled tax regime will be abolished. Transitional arrangements for existing non-doms claiming the remittance basis will include an option to rebase the value of capital assets to 5 April 2019 and a temporary 50% exemption for the taxation of foreign income for the first year of the new regime (2025-26). The government will also offer a two-year Temporary Repatriation Facility for individuals who have paid tax on the remittance basis prior to 6 April 2025 to bring previously accrued foreign income and gains into the UK at a 12% rate of tax.
• From 6 April 2025, the government will introduce a new residence-based regime specifically designed to make the UK more competitive. Individuals will not pay UK tax on any foreign income and gains arising in their first four years of tax residence, provided they have been non-tax resident for the last 10 years. Eligible employees will also be able to claim Overseas Workday Relief in their first three years of tax residence for income from employment duties carried out overseas.
• Stamp duty land tax multiple dwellings relief will be abolished for transactions from 1 June 2024. The government will engage with the agricultural industry to determine if there are any particular
  impacts for the sector that should be considered further.
• Easing the payment of inheritance tax before probate or confirmation; from 1 April 2024, personal representatives of estates will no longer need to have sought commercial loans to pay inheritance tax before applying to obtain a “grant on credit” from HMRC.

Frozen

• Alcohol duty freeze extended to 1 February 2025.
• The 5p per litre cut and freeze on fuel duty will remain until March 2025.

Other Matters

• The government also announced the intention to move to a residence-based regime for Inheritance Tax (IHT) and will consult in due course on the best way to achieve this. No changes to IHT
  will take effect before 6 April 2025.
• The government will legislate in the Spring Finance Bill 2024 to ensure individuals cannot use a company to bypass anti-avoidance legislation, known as Transfer of Assets Abroad (ToAA) provisions, in
  order to avoid UK income tax. The changes will take effect for income arising to a person abroad from 6 April 2024.
• HMRC have updated their guidance on the tax deductibility of training costs for sole traders and the self-employed to provide certainty to those that want to invest in boosting their productivity.
• A new £5k British ISA allowance will be introduced, in addition to standard ISA allowances.
• The temporary increases in the rates of tax relief for orchestras, museums, galleries, and theatres tax will be made permanent at a rate of 45% tax relief for touring productions, and 40% relief for non-touring productions, from 1 April 2025.
• A new 53% tax credit for independent British films with a budget of less than £15m will be available via the audio-visual expenditure credit (AVEC), for films commencing photography from 1 April 2024.
• An excise duty on vapes will be introduced from 1 October 2026, alongside an increase in tobacco duties from the same date.
• The government will also establish a joint working group between HM Treasury, HMRC, and industry representatives to identify solutions that provide clarity on the tax treatment of the production and sale of ecosystem service credits and associated units, where existing law or guidance may not provide sufficient clarity.
• The government will bring forward a further set of tax administration and maintenance announcements on 18 April 2024 at a Tax Administration and Maintenance Day.
• The government has asked universities to report on their spinout policies by the end of May 2024 and has also begun consulting on the design of the new £20 million proof-of-concept fund and the pilot
  approach to supporting the establishment by universities of shared Technology Transfer Offices.