Finance Act 2024 receives Royal Assent

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The Finance Bill 2023-24 became the legally binding Finance Act 2024 on 22 February 2024. As a result, a number of measures take effect from that date.

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Legislation included in an Act comes into force on the date of Royal Assent. However, a different start date may be specified, which is the case for many of the measures included in Finance Act 2024 (FA 2024). For example, the introduction of the new merged scheme for research and development (R&D) tax relief takes effect for accounting periods beginning on or after a date yet to be appointed (believed to be 1 April 2024).

Measures for which a commencement date is not specified, and so would take effect from 22 February 2024, include legislation that:

makes permanent the 100% first year allowance (FYA) for main rate expenditure on plant and machinery and the 50% FYA for special rate expenditure (s1, FA 2024). The 100% FYA is better known as ‘full expensing’;
amends the rules for real estate investment trusts (REITs) (s8, Sch 7). This is the third set of amendments to come out of a 2021 government review with the intention of simplifying the regime and making it more attractive to investors. The commencement arrangements are complicated as some provisions are deemed always to have had effect, and one measure has effect for accounting periods ending on or after 1 April 2023;
gives HM Treasury the power to make regulations to address the tax impacts of a rectification exercise concerning pension schemes for members of Parliament, the Senedd and the Northern Ireland Assembly (s15). The changes are capable of having retrospective effect;
makes a minor technical amendment to restrictions on the use of certain rebated heavy oils and bioblends (s26);
increases the maximum term of imprisonment from 7 years to 14 years for the most serious tax offences (s32);
gives HMRC the power to apply for directors and individuals involved in the operation of companies promoting tax avoidance to be disqualified from becoming directors in the future (s33); and
introduces a new criminal offence for failure to comply with a notice requiring tax avoidance promoters to stop carrying on their activities (s34).

For further information on Finance Act 2024, see the dedicated page on icaew.com. A link will be added to Finance Act 2024 in due course.

For a summary of the changes taking effect from 1 April 2024 for companies and 6 April 2024 for individuals, see this TAXline article.

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