The Tax Round: Winter Edition

We are delighted to present the Winter Edition of the Tax Round, which delivers a carefully curated selection of the most recent tax developments. In this edition, you will discover insightful coverage on the changes to the taxation of non-domiciles in the UK, a comprehensive look at the R&D tax relief and new Merged Scheme, the latest SDLT tax changes and the updates on the tax treatment of double cab pickups, as well as a detailed guide to the Autumn Budget.

We have cherry-picked the latest news and updates that we hope you will find interesting. Additionally, we’ve included essential key diary dates for the upcoming months to keep on your radar.

Our tax articles include the following: 

• Changes to the Taxation of Non-Domiciles in the UK
• R&D Tax Relief: Navigating the new Merged Scheme in 2024 
• Stamp Duty Land Tax rate changes
• Turning Full Circle: HMRC Double Cab Pickup Tax Treatment Update
• Autumn Budget 2024
• James’ Team Story: Experienced Corporate Tax Manager finds supportive home at Rayner Essex

Happy Reading!

If you have any questions or need further clarification on the topics covered in this newsletter, or if you have any other inquiries related to tax and accounting, please don’t hesitate to reach out to Mark Moore.

Changes to the Taxation of Non-Domiciles in the UK

From April 2025, the current tax system for non-UK domiciled individuals will be abolished. This will be replaced by a residency-based system which will tax individuals on their worldwide income and gains.

Following the initial proposed rules announced by the previous Conservative government in March 2024, and announcements from the new Labour government during the summer, the new rules for UK tax on foreign nationals have now been confirmed in the Autumn Budget on 30 October 2024. The government’s aim by introducing the new residency-based system is to continue to modernise the UK tax system and follows the 2017 domicile reforms which saw the introduction of the deemed domicile rules.

Whilst there is no doubt that the new system will simplify the rather complicated existing remittance basis system, particularly for those individuals where a remittance basis claim involves the analysis of numerous offshore bank accounts, other individuals will be disappointed to learn that foreign income and gains can no longer be sheltered from UK tax under the remittance basis, potentially landing these individuals with higher UK tax liabilities.

Read more

R&D Tax Relief: Navigating the New Merged Scheme in 2024

Summary of the New Landscape for R&D Tax Relief

With the introduction of both the Additional Information Form and Research and Development Advanced Notification Form in 2023, which can be seen in my recent article Research and Development new requirements and notification changes, 2024 marks significant changes to the Research and Development (R&D) tax relief landscape. The most notable is the new merged R&D scheme, designed to streamline and modernise relief for UK companies. While some aspects are still under draft legislation, here’s an overview of the key points businesses should consider.

The Merged R&D Scheme: What You Need to Know

Starting from accounting periods on or after 1st April 2024, the merged R&D scheme will be the only option for companies not eligible for the R&D intensive scheme. This scheme consolidates the former SME and RDEC schemes, leaning more towards the structure of the RDEC scheme. However, some elements of the SME scheme remain, such as the more generous cap for PAYE/NICs at £20,000 plus 300% of relevant PAYE and NIC liabilities.

Read more

Stamp Duty Land Tax Rate Changes

Somewhat unexpectedly, the government has increased the Higher Rate for Additional Dwellings (HRAD), commonly known as the SDLT surcharge for second homes, by 2%. This raises the rate from 3% to 5%, effective from 31 October 2024 – the date of the recent Budget announcement.

This deadline leaves no room for manoeuvre. Transactions where contracts have been exchanged on or before this date will fall under the previous rules. However, for any transactions not exchanged by this deadline, the new rules will apply.

SDLT Rate Changes

The 2 percent points increase in the HRAD surcharge on Stamp Duty Land Tax (SDLT), raising it from 3% to 5%, aims to provide a competitive advantage to those purchasing their first home or moving house over second-home buyers, landlords, and businesses acquiring residential property.

Read more

Turning Full Circle: HMRC Double Cab Pickup Tax Treatment Update

On 19 February 2024, HMRC made a swift U-turn on the tax treatment of double cab pickups (DCPUs), reversing the guidance issued just a week earlier on 12 February 2024. The initial update followed a 2020 Court of Appeal judgment, but the latest Autumn Budget now confirms significant changes coming into effect from 1 April 2025.

From this date, double cab pickups with a payload of one tonne or more will no longer be classified as commercial vehicles. Instead, they will be treated as cars for capital allowances and Benefit-in-Kind (BIK) purposes.

Read more

Autumn Budget 2024

On 30 October Rachel Reeves, new Chancellor of the Exchequer, delivered the Labour government’s first Budget. She emphasised the government’s commitment to “fixing the foundations to deliver change”, aiming to guide the UK towards economic recovery and initiate “a decade of national renewal” following 14 years of Conservative rule. 

Central to this historic Budget is the plan to address the £22 billion “black hole” deficit in public finances inherited by the Labour government, whilst restoring stability and rebuilding public services.

Reeves stated that this budget will raise taxes by £40bn to ensure the funding for essential services and future economic stability. At the same time, it will raise government borrowing and spending, including a substantial boost in NHS funding to help rejuvenate healthcare services, with the goal of “rebuilding Britain and delivering change.”

Read more

Key Dates 2024/2025

30 December 2024 – Submit online personal tax return for 2023/24 if taxpayer wants HMRC to collect tax underpayment (below £3,000) through PAYE coding  

if underpaid tax is to be collected by PAYE tax code .

• 01 January 2025 – VAT becomes due on private school fees.

• 31 January 2025 – Deadline to pay and submit Self-Assessment Tax Returns for tax year ending 5 April 2024 (personal, trustee & partnership).

• 31 January 2025  – First Payment on Account for Income Tax due for 2024/2025.

• 01 February 2025 – Interest starts to accrue on any unpaid self-assessment tax liability due for 2023/24.

• 26 March 2025 –  Spring Budget Statement.

• 31 March 2025 – Last day of temporary reduction in Stamp Duty land Tax for the purchase of residential property in England. (Stamp Duty Land Tax (Temporary Relief) Act 2023).

• 01 April 2025 – Financial Year 2025 begins.

• 01 April 2025 – New rates for National Living Wage apply.

• 01 April 2025 – The nil-rate threshold for Stamp Duty Land Tax First Time Buyers’ Relief falls from £425,000 to £300,000. 

• 05 April 2025 – Deadline for paying voluntary NICs expires.

• 06 April 2025 – New tax year 2025/26 begins. 

• 06 April 2025 – 1.2% rise in employers’ NICs, £4,100 reduction in employee threshold for paying this, and £5,500 rise in Employment Allowance.

• 06 April 2025 – Furnished holiday letting tax regime abolished.

• 06 April 2025 – Business Asset Disposal Relief CGT rate increases from 10% to 14%.

• 06 April 2025 – Non Domicile rules replaced with a new regime based on residence.

Get in Touch

Should you require additional guidance or information on any matters discussed in this newsletter, or if you have other enquiries related to tax and accounting, please feel free to contact Mark Moore. We look forward to hearing from you.