No Match Found
Corporation tax - There has been no further change to the rates of corporation tax.
Capital Allowances - At the Spring Budget 2023, the government replaced the super deduction regime with ‘full expensing’ for 3 years from 1 April 2023, allowing businesses to write off the full cost of qualifying plant and machinery investment against their taxable profits.
The government is now making this change permanent with a 100% first year allowance for main rate assets and 50% first year allowance for special rate (including long life) assets.
Research & Development
The existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 to be claimed in the merged scheme. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25% as per the current RDEC scheme, to 19%.
The intensity threshold in the additional support for R&D intensive loss-making SMEs will be reduced from 40% to 30%, bringing approximately 5,000 more R&D intensive SMEs into scope of the relief. In addition, the government is introducing a one-year grace period, so that companies that dip under the 30% qualifying R&D expenditure threshold will continue to receive relief for one year.
OECD Pillar Two - The government will implement the OECD Pillar Two Undertaxed Profits Rule for accounting periods beginning on or after 31 December 2024, alongside the repeal of the Offshore Receipts of Intangible Property rules, as part of the G20-OECD global minimum tax framework.
This provides that multinational enterprises will be subject to a minimum 15% effective tax rate in every jurisdiction in which they operate.
Investment Zones Programme Extension - The Investment Zones programme in England will be extended from five to ten years and three new zones were announced in Greater Manchester, West Midlands and East Midlands.
Business rates - The government will introduce a business rates support package worth £4.3bn over the next five years to support small businesses and Retail, Hospitality and Leisure (RHL).
This includes extending the 75% relief for RHL for 2024-25, up to a cash cap of £110,000, and freezing the small business multiplier for a fourth consecutive year. The standard rate multiplier will be increased in line with CPI inflation.
Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) - The EIS and VCT reliefs were due to expire after 5 April 2025; new legislation will be introduced to extend the lifetime of these reliefs to 2035.
Annual Tax on Enveloped Dwellings (ATED) - ATED annual charges will be increased by 6.7% from 1 April 2024 in line with the September 2023 Consumer Price Index.
Income tax rates and thresholds - There have been no changes to income tax thresholds or rates.
National Minimum and Living Wage - From 1 April 2024, the National Living Wage will increase by 9.8% to £11.44 an hour for eligible workers across the UK aged 21 and over.
National Insurance Contributions (NICs) rates
Employees: The main rate of Class 1 employee NICs will be reduced from 12% to 10% from 6 January 2024. This will apply to earnings between £12,570 and £50,270 per annum.
Self-employed: The rate of Class 4 NICs, paid by the self-employed on earnings between £12,570 and £50,270 will be reduced from 9% to 8% from 6 April 2024. In addition the Class 2 NICs, paid at a flat rate of £3.45 a week by the self-employed with profits above £12,570 will be abolished from 6 April 2024. However access to contributory benefits, including the State Pension will be maintained. Those with profits between £6,725 and £12,570 will continue to access benefits above through a National Insurance credit without paying NICs as they do currently.
The Government will expand and simplify the income tax cash basis for the self-employed and partnerships from 6 April 2024, following a consultation at Spring Budget 2023.
Individuals with income taxed only through Pay As You Earn (PAYE) will not be required to file a Self Assessment return from 2024-25.
The Government confirmed that Making Tax Digital (MTD) will be going ahead for self-employed individuals and landlords with annual income over £50,000 from April 2026, followed by those with income over £30,000 from April 2027. The position of those with income below £30,000 is being kept under review. A number of simplifications to MTD have been announced.
Pension reform - The Government has announced a comprehensive package of pension reforms designed to provide better outcomes for savers, drive a more consolidated pensions market and enable pension funds to invest in a diverse portfolio.
The authorised surplus repayment charge will also be reduced from 35% to 25% from 6 April 2024.
Pension triple lock - The Government will maintain the “triple lock”. From April 2024, the full new state pension will increase by 8.5% to £11,500 per year, an increase of over £900.
Areas where no announcements were made
There were no announcements on the taxation of non-domiciled individuals, wealth taxes, inheritance tax or capital gains tax.
The Government will allow multiple subscriptions to ISAs of the same type every year from April 2024, and bring Long Term Asset Funds into the scope of Innovative Finance ISAs from April 2024. This will increase flexibility and choice for savers and investors, and support the development of long-term investment products.
The Government will also allow partial transfers of ISA funds in-year between providers and remove the requirement to reapply for an existing dormant ISA from April 2024.
The government will expand the scope of the zero rate of VAT on Women's Sanitary Products to include reusable period underwear from 1 January 2024.
The government will extend the zero rate of VAT on Energy-Saving Materials from 1 February 2024 by expanding the relief to include new technologies such as water source heat pumps and to bring buildings used for solely charitable purposes into the scope of the zero rate. Further details on the reforms will follow and the zero rate for all aspects of the relief is still due to revert back to a reduced rate (currently 5%) from 1 April 2027.
The government will consult on the impacts of the July 2023 High Court ruling in Uber Britannia Ltd v Sefton MBC on the VAT treatment of Private Hire Vehicles.
The government will continue to accept industry representations on the VAT Retail Export Scheme and the associated airside scheme (tax-free shopping) and consider these representations carefully alongside broader data.
Alcohol / tobacco - The government will freeze alcohol duties until 1 August 2024 and delay its annual uprating decision to Spring Budget 2024, to give businesses time to adapt to the duty system introduced on 1 August 2023.
The government will increase duty on all tobacco products by RPI+2% and will increase the duty on hand-rolling tobacco by RPI+12%. These changes will take effect from 6pm on 22 November 2023.
HGV Levy and Vehicle Excise Duty - The HGV Levy and Vehicle Excise Duty for HGVs will be frozen at 2023-24 rates for 2024-25.
The government will uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with RPI from 1 April 2024.
Gaming duty - The government will maintain the Gross Gaming Yield bands for gaming duty for one year from April 2024.
The government will consult on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through a three-tax structure (general betting duty, pool betting duty and remote gaming duty).
Plastic Packaging Tax (PPT) - PPT will increase in line with CPI to £217.85 per tonne from 1 April 2024.
Green taxes (PPT/CBAM)
The government will freeze the main and reduced rates of Climate Change Levy for one year from April 2025, and extend the Climate Change Agreement scheme for six years from 1 January 2025 to 31 December 2030.
The government will increase the Aggregates Levy rate in line with RPI from 1 April 2025 to £2.08 per tonne.
The government will launch a £78 million competitive pilot fund to alleviate the cost of landfill tax where it is acting as a barrier to the remediation and redevelopment of contaminated land.
The government will maintain Carbon Price Support (CPS) rates in Great Britain at a level equivalent to £18 per tonne of carbon dioxide in 2025-26. The government will continue to engage with industry and review CPS beyond the announced rates.
As set out by the UK ETS Authority in July 2023, the government will reduce the number of ETS permits available for purchase from government by 45% between 2023 and 2027. It will also extend the scheme to cover emissions from domestic maritime and energy from waste in 2026 and 2028 respectively
The government will publish a consultation on the tax treatment of environmental land management and ecosystem service markets in spring 2024, following a review launched at Spring Budget 2023. This will seek views on how the tax system can support the delivery of public goods and the transition to a net zero economy.
The government will introduce a new investment exemption for the Electricity Generator Levy, which will apply to certain investments in renewable and low-carbon generation from 22 November 2023.
The ‘full expensing’ regime introduced for 3 years from April 2023 is to be made permanent.
The existing Research and Development Expenditure Credit (RDEC) and SME schemes will be merged with effect from 1 April 2024.
The main rate of employee NICs will be reduced from 12% to 10% from 6 January 2024. There are also reductions in NICs for the self-employed from 6 April.
The ‘triple lock’ will be maintained and from April 2024 the full new state pension will increase by 8.5%.
From 1 April 2024, the NLW will increase to £11.44 an hour for eligible workers aged 21 and over.
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Head of Tax policy, PwC United Kingdom
Tel: +44 (0)20 7213 5449
UK Chief Economist, PwC United Kingdom
Tel: +44 (0)7711 562331