On 29 July 2024, the Chancellor of the Exchequer, Rachel Reeves, delivered a statement to Parliament on the government’s public spending inheritance. In the statement, the Chancellor confirmed that the Budget would be delivered on 30 October 2024, and repeated the Labour Party’s manifesto commitment not to increase Income Tax, National Insurance Contributions or VAT. The government also provided an update on key tax measures, including various draft legislation.
The announcements included:
- Removal of the VAT exemption for private school fees and boarding services. This will apply to fees paid from 29 July 2024 onwards, in relation to the term stating in January 2025 and future terms.
- Abolition of the Furnished Holiday Lettings tax regime, including certain transitional rules
- Changes to the taxation of non-UK domiciled individuals, with a policy paper being published
- A call for evidence regarding the tax treatment of carried interest (a form of performance-related reward received by fund managers)
- Changes to the Energy (Oil and Gas) Profits Levy
- A new transitional “Pillar 2” country-by-country reporting safe harbour anti-arbitrage rule
Separately, the Chancellor has now admitted that taxes will have to be raised at the Budget. While no specific details have yet been provided, Capital Gains Tax and/or Inheritance Tax seem to be the likely targets, given the commitment not to increase taxes on “working people”.
We will provide a further update as more details become available.
