Download tax rates and allowance table

This is a basic guide prepared by Hamilton Coopers for clients. It should not be used as a definitive guide since individual circumstances may vary. Specific advice should be obtained, where necessary.

Spring Budget 2024

October 30, 2024

Corporation tax

The corporate tax roadmap confirms the major features of the Corporation Tax regime for the duration of this Parliament including:

capping the headline rate of Corporation Tax at 25%
maintaining the Small Profits Rate and marginal relief at their current rates and thresholds
maintaining permanent full expensing
maintaining the £1m Annual Investment Allowance, writing down allowances, and the Structures and Buildings Allowance
maintaining the rates for the merged R&D Expenditure Credit scheme and the Enhanced Support for R&D Intensive SMEs
maintaining the Patent Box.

MTD

Making Tax Digital (MTD) for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of this Parliament. This expands the rollout of MTD for Income Tax, which is April 2026 for sole traders and landlords with income over £50,000 and April 2027 for those with income over £30,000.

Rates relief

Through 2025-26, the small business multiplier will be frozen, together with Small Business Rates Relief. Announced the intention to introduce permanently lower business rates multipliers for high street retail, hospitality and leisure properties (RHL) from 2026-27. The government intends to fund it through a higher multiplier for the most valuable properties.

IHT

IHT thresholds have been frozen until 2030. In addition, significant restrictions on agricultural and business property relief are proposed from April 2026. Unused pension funds and death benefits will be included in estates from April 2027.

CGT

Effective 30 October 2024, the main rates of Capital Gains Tax and carried interest will increase from 10% to 18% and from 20% to 24%. The rate for trustees and personal representatives will rise from 20% to 24%, while the existing rates for residential property (18% and 24%) will remain unchanged.

From 6 April 2025, the rate for Business Asset Disposal Relief and Investors’ Relief will increase from 10% to 14%. This will further rise from 14% to 18% on 6 April 2026. The Investors’ Relief lifetime limit will be reduced from £10m to £1m for qualifying disposals made on or after 30 October 2024.

Private equity managers will have to pay 32% tax on their carried interest gains from April 2025.

National Insurance and Employment allowance

From 6 April 2025, the rate of employer National Insurance Contributions (NICs) for Classes 1, 1A and 1B will rise by 1.2 percentage points to 15%.

The threshold at which employers start to pay NICs will decrease from £9,100 to £5,000 per year.

The government will increase the Employment Allowance from £5,000 to £10,500 and remove the previous £100,000 threshold, making it available to all eligible employers.

VAT Thresholds

From 1 April 2024 the taxable turnover threshold which determines whether a person must be registered for VAT were increased from £85,000 to £90,000. The taxable turnover threshold which determines whether a person may apply for deregistration were increased from £83,000 to £88,000. No further changes were announced.

Furnished Holiday Lettings (FHL) regime abolished

The government will abolish the FHL tax regime, eliminating the tax advantage for landlords who let out short-term furnished holiday properties over those who let out residential properties to longer-term tenants. This will take effect from April 2025.

At present, landlords who use the furnished holiday lets regime can deduct the full cost of their mortgage interest payments from their rental income, are entitled to capital allowances on the furniture, pay lower capital gains tax (CGT) when they sell and are entitled to CGT rollover relief etc.

Income tax

Personal tax thresholds – ie personal allowance, basic and higher-rate thresholds for income tax remain frozen until April 2028 at the current level of £12,570 and £50,270. The additional rate threshold was reduced from £150,000 to £125,140 from 6 April 2023. The Chancellor did announce that the thresholds will be uprated by inflation from April 2028 onwards.

Personal allowance for higher rates from 2023/24

Where annual income exceeds £100,000, personal allowance is lost at a rate of £1 for every £2 of income above £100,000. This is the threshold where the entire personal allowance is lost.

The loss of the personal allowance means a person is taxed at 40% on the additional £2 of income, and they also pay an extra 40% on the £1 of personal allowance lost. This results in a marginal rate of 60%, which continues up to £125,140 (£100,000 + (£12,570 x 2)). At the £125,140 point the entire personal allowance is lost.

SDLT

From 31 October 2024 the Higher Rates for Additional Dwellings (HRAD) surcharge on Stamp Duty Land Tax (SDLT) will be increased by 2 percentage points from 3% to 5%.

Taxation of Employee Ownership Trusts and Employee Benefits Trusts

A package of reforms to the taxation of Employee Ownership Trusts and Employee Benefit Trusts will be legislated. These reforms will ensure that the regimes remain focused on encouraging employee ownership and rewarding employees, and to prevent opportunities for abuse. The changes will take effect from 30 October 2024.

Taxation of company cars — the appropriate percentage for tax years 2028 to 2029 and 2029 to 2030

The government is setting company car tax rates for tax years 2028 to 2029 and 2029 to 2030:

Appropriate percentages for zero emission and electric vehicles will increase by 2 percentage points per year in 2028 to 2029 and 2029 to 2030, rising to an appropriate percentage of 9% in tax year 2029 to 2030.
Appropriate percentages for all cars with emissions of 1 to 50g of CO2 per kilometre, including hybrid vehicles, will rise to 18% in tax year 2028 to 2029 and 19% in tax year 2029 to 2030.
Appropriate percentages for all other vehicle bands will increase by 1 percentage point per year in tax years 2028 to 2029 and 2029 to 2030. This will be to a maximum appropriate percentage of 38% for tax year 2028 to 2029 and 39% for tax year 2029 to 2030.

Changes to the taxation of non-UK domiciled individuals

The government will introduce legislation in Finance Bill 2024-25, abolishing the remittance basis of taxation for non-UK domiciled individuals and replacing it with a residence-based regime, which will take effect from 6 April 2025.

Individuals who opt into the regime will not pay UK tax on foreign income and gains (FIG) for the first four years of tax residence. From 6 April 2025, the government will introduce a new residence-based system for Inheritance Tax.