2024 has been a year to remember in tax thanks largely to the effect of the General Election, which resulted in a change in government, which in turn resulted in two Budgets. We review our Top Ten Tax Hits of 2024.
While the Chancellor's budget announcements are always 'big hitters' in terms of our most-read articles, HMRC was responsible for many of the greatest hits of last year. Social media also played its part, propelling some topics up into the hit parade for their 'click bait' properties. Two new items featured motor vehicles.
The 2024 hit parade:
In 10th place: the then Chancellor, Jeremy Hunt used the 2024 Spring Budget to announce some wide-ranging reforms with a couple of tax cuts and new relief across a range of different taxes. His key announcements included a 2% reduction in the rate of National Insurance Contributions (NICs), a raft of announcements on Land and Property tax, including a 4% reduction in Capital Gains Tax (CGT) for higher rate taxpayers disposing of residential property, the Abolition of SDLT Multiple Dwellings relief, the Abolition of the Furnished Holiday Lettings regime and the Reform of the Non-Domicile tax regime. The demise of the VAT threshold also rose by £5,000.
In 9th place: HMRC revealed that it was writing to Non-resident companies who had missed the 2024 Corporation Tax rate changes. Companies that have missed the change in rate will probably have also missed the requirement to total up their associated companies and add that figure to their returns too.
In 8th place: Tabloids and social media started reporting on a new 'Taxi-tax'. Upon closer inspection we found no new tax but that the media had picked up on two disputes about VAT. Both Uber and Bolt have had run-ins with HMRC. HMRC subsequently published a consultation on VAT treatment of private hire vehicles, we are still waiting to hear the outcome.
In 7th place: HMRC introduced a New Tax Basis Reform Calculator to help self-employed individuals determine their transition profit for 2023-24, under the Basis Year Reform rules.
In the months that followed there were a series of curious events:
In 6th place: A surprise entrant into the top ten of 2024 was a tribunal decision that Input VAT was recoverable on the purchase of a couple of Land Rovers. The owners managed to persuade the tribunal that both vehicles were used solely for business purposes.
In 5th place: During 2024 there was evidence of widespread confusion in online forums about 'Side-Hustle' Tax. This saga was later accelerated when Money Saving Expert Martin Lewis accidentally overcomplicated the rules and then tried to correct himself by oversimplifying them.
In 4th place: HMRC issued 'correction letters' to landlords to confirm a change in guidance: it confirmed that A new Boiler can be considered an Allowable Expense for Landlords against rental income, even when it constitutes an upgrade driven by advancements in technology.
In 3th place: Let's all skill up! HMRC revised their guidance on Tax relief for Business Owner's Training Courses in March 2024. Confirming that sole traders can now obtain tax relief on training costs.
In 2nd place: Back in February, days after announcing that HMRC was going to make business owners reclassify their double cab pick-ups as ‘cars’ for employment benefit and capital allowance purposes, HMRC caved in the combined lobbying from the motor and farming industries and changed its policy. The resultant U-turn on double cab pick-ups will be short-lived as the tax treatment will still change following an Autumn Budget announcement.
And coming at Number 1:
The biggest hitting story of the year was a piece in which we speculated on potential announcements to be made in the Autumn Budget 2024.
It was unusual for us to create that kind of article like that as our motto is 'less is more' and we normally avoid all budget speculation! We went ahead due to popular demand: a high volume of tax queries to our sister services' Virtual Tax Partner support portal indicated that many tax folks were speculating like crazy and so we did too!
Our predictions were pretty good, as it goes and new Chancellor Rachel Reeves (who made history as the first female chancellor) Made Autumn Budget 2024 announcements which included:
- IHT reforms:
- Inherited pensions will be liable to IHT from 2027.
- Agricultural Property Relief (APR) and Business Property Relief (BPR) will be reformed from April 2026, with a 50% restriction to relief where combined assets exceed £1m.
- CGT changes: from 30th October 2024 the lower rate of CGT increased to 18%, the higher rate to 24%. Further changes were made to restrict BADR for Investors' Relief, and there were reforms to the Employee Ownership Trust (EOT) rules and the liquidation of LLPs.
- NICs: From 2025, a 2% rise in Employers NICs, with a decrease in the Employer's secondary threshold and an increase in the ERs NICs allowance.
- VAT: remove the VAT exemption on private school fees and business rates relief.
- The changes to Reform the Non-Domiciled regime were confirmed and tweaked too.
See Autumn Budget 2024: At a glance
2024: runners up
There were almost too many runners-up topics to list, 2024 was a bumper year in terms of tax announcements, here are a handful of some of the other hot topics.
- HMRC continued to consult on Raising Standards in the Tax Market: Tax Registration
- IR35 again featured highly at the tax tribunals as Off-Payroll Working remains a problematic topic, with a lack of clarity on definitions for umbrella companies and Managed Service Companies.
- The tribunals heard a vast number of tax penalty appeals, late appeal applications and procedural points.
- Companies House continued its reforms with a record 134% fee increase.
- In terms of payroll, we had changes to the reporting of salary advances.
- The Post Office Horizon scandal resulted in special filing concessions and guidance.
If you are a subscriber you can review all the key announcements in our 2024/25 Tax Update and Rolling Planner. This does what it 'says on the tin', and provides for you tax topic-by-topic details of what is 'hot or not' in tax in the tax year to date.
