Enterprise investment scheme (EIS) and venture capital trusts (VCTs) extended
The government has announced that EIS and VCT relief will be extended for a further ten years, beyond their existing sunset clause expiry date of 5 April 2025. This is subject to UK and international subsidy obligations being met.
Clarity over deductibility of training costs
HMRC will rewrite its guidance around the tax deductibility of training costs for sole traders and the self-employed. This will make it clear that training to update existing skills or maintain pace with technology or industry practices, are allowable costs for tax purposes.
Individual savings accounts (ISAs)
From 6 April 2024, individuals will be able to subscribe for multiple ISAs of the same type (cash or stocks and shares). They will also be able to transfer funds (at least partially) between accounts from different providers. These are among several measures to simplify and widen the scope of ISAs.
The government also announced that the ISA reporting system will be digitalised to help support investors.
Delay to digitalisation of pensions relief at source (RAS)
Digitalisation of RAS pension administration was originally planned to be possible from April 2025. After consultation with industry, the government has delayed the implementation until at least April 2027. There will therefore be no enabling clause in the Autumn Finance Bill 2023.
Beneficiaries of pensions from pre-75 deaths
In documents on the abolition of the lifetime allowance from 6 April 2023, changes to the taxation of pensions funds from those who were under 75 at death were proposed. Beneficiaries of such pensions would have then been subject to income tax on pension income received under benefit crystallisation event (BCE) 5C and 5D.
Documents published as part of the Autumn Statement confirm that the current treatment is continuing, so beneficiaries of unused uncrystallised funds designated to a beneficiary’s drawdown pension fund (BCE 5C) or to purchase an annuity for a beneficiary (BCE 5D) from those under 75 at death will not become subject to income tax, unless it is a lump sum death benefit that exceeds the deceased member’s lump sum tax-free limit (£268,275).
VAT treatment of private hire vehicles
The government will consult in early 2024 on the impact of Uber Britannia Ltd v Sefton Metropolitan Borough Council (MBC) on VAT in the private hire sector.
In 2021, the Supreme Court ruled that Uber acts as principal in its supplies of transport and should therefore charge VAT on all its fares. Uber contended that it was acting as agent and should only charge and account for VAT on its services to the drivers. Having lost in the Supreme Court, Uber took the case against Sefton MBC to ensure the Supreme Court decision would apply to all private hire firms across the UK (and not just Uber).
It is expected that the consultation will consider whether a change in legislation is required to clarify the VAT position of private hire firms.
Administrative changes to the creative industry tax reliefs
A new mandatory information form is being introduced for all creative reliefs and credits. This includes:
- the new audio visual expenditure credit (AVEC);
- the new video games expenditure credit (VGEC);
- film tax relief (FTR);
- high-end television (HETV) animation tax relief (ATV);
- children’s TV tax relief (CTR);
- video games tax relief (VGTR);
- theatre tax relief (TTR);
- orchestra tax relief (OTR); and
- museum and galleries exhibition tax relief (MGETR).
A policy paper published as part of the Autumn Statement provides further details.
Draft legislation, published on 18 July 2023, has been amended. It was proposed that expenditure representing connected party profit would be excluded. It now stipulates that the cost of goods or services provided between connected parties must be at an arm’s length price. This will be introduced to the AVEC, VGEC, and the cultural reliefs. Companies will be required to disclose connected party transactions as part of the new information form.
For AVEC and VGEC, this measure will take effect from 1 January 2024 to align with the introduction of the new regimes. For the other cultural reliefs, mandatory use of the of the online information form will come into effect from 1 April 2024.
Call for evidence on the UK visual effects sector
This call for evidence will inform the development of targeted proposals for how the government provides additional support and tax relief for expenditure on visual effects. It asks for evidence on recent trends in the visual effects industry. It also asks how the current structure of film and high-end TV tax reliefs impact investment decisions. Responses are requested by 3 January 2024, with meetings being held during December with interested parties. It is anticipated that the relief will apply from April 2025.
Extension of national insurance contributions (NIC) relief for hiring veterans
Employers hiring veterans can currently claim relief on secondary NIC. This relief was due to expire on 6 April 2024. However, in the Autumn Statement, it was announced that the government is extending the relief until April 2025.
Blended NIC rate for directors and annual maximum calculations
Class 1 NIC paid by directors are assessed on an annual basis. As the class 1 primary rate is reducing mid-year, the equivalent annual blended rate for directors is 11.5% for 2023/24 (or 5.35% for directors who have elected to pay the married women and widows reduced rate).
The 11.5% blended rate will also apply for annual maximum calculations for those with more than one employment.
Van benefit charge and the car and van fuel benefit charges for 2024 to 2025
The government announced that the van benefit charge and the car and van fuel benefit charges will be frozen at 2023/24 levels for 2024/25.
This means that:
- the flat-rate van benefit charge will remain at £3,960;
- the multiplier for the car fuel benefit will remain at £27,800; and
- the flat-rate van fuel benefit charge will remain at £757.
Stamp duty and stamp duty reserve tax (SDRT): widening access to the growth market exemption
The growth market exemption provides relief from stamp duty and SDRT for trades made on a ‘recognised growth market’. From 1 January 2024, the government plans to allow Financial Conduct Authority regulated multilateral trading facilities to access the exemption.
The requirements for the exemption are also being updated. The majority of companies on markets accessing the exemption must have market capitalisation of less than £450m. This is an increase from the current cap of £170m.
- 30 Nov 2023 (12: 00 AM GMT)
- Reference to class 4 NIC removed from the section ‘Blended NIC rate for directors and annual maximum calculations’. The rate used for regulation 100 (annual maximum of class 4 contributions) is the main primary percentage.
On 22 November 2023, Chancellor Jeremy Hunt delivered the Autumn Statement. Read ICAEW's analysis and reaction.
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