Holiday let owners are set to lose favourable tax reliefs from April 2025 meaning all property income (FHLs and residential properties) will be treated the same.
The hospitality, retail and leisure sector has had a turbulent few years with increased costs and the post Covid boom cooling significantly in the past year; businesses would have been hoping from some good news from the Chancellor.
The Chancellor delivered her long awaited first budget and with it has fundamentally changed the Inheritance Tax (IHT) reliefs that have existed for many years. As well as bringing more value into people’s estates through the inclusion of inherited pensions from April 2027, business and agricultural reliefs have also been reformed, making them less attractive.
Whilst the announcements will undeniably cause some pain, especially for businesses who will see their employment costs increase substantially, the reality is that at certain points during the build-up, the expected tax increases were forecast to be much larger than have materialised.
The recent budget announcement brought several significant updates to payroll and tax regulations, most notably to Employers’ National Insurance Contributions and the National Minimum Wage – both of which will have a significant impact on employers’ wage bills.
Under the current rules, UK tax resident non-domiciles who haven’t become deemed-domiciled can choose to be taxed on the remittance basis. Currently Individuals suffer tax on their UK income and gains in the same way as other UK residents, they only pay tax on their foreign income and gains (FIG) when these are remitted to the UK.
The main headline on employee taxation that was slipped into the official Budget documentation after the Chancellor’s speech, is the announcement that employer-provided Double-Cab Pickup Vehicles (DCPUs) over one tonne will no longer be taxed as company vans from 6 April 2025.
Ahead of the Autumn Budget there are pessimistic outlooks on the economy and warnings of a huge “black hole" to be funded. Labour’s manifesto stated there will be no increase in National Insurance, income tax rates or VAT and there has been a subsequent commitment corporation tax will be capped at the current rate. Given these commitments, where is there left to go to fill the deficit?
The new VAT legislation on private school fees, due to apply from 1st January 2025, presents many challenges and it is vital that schools carefully consider their options, including some highlighted here.
The Government has painted a very gloomy outlook for the UK, with announcements that there will be some pain coming in the Budget but the Budget needs to provide some good news to stimulate growth.