Autumn Budget 2024: Key tax policy updates and implications

During the Parliamentary speech on July 29th, Chancellor Rachel Reeves announced that the Autumn Budget will be delivered on October 30, 2024, marking the first Budget under the new Labour government.

As the government lays out its financial roadmap, this Budget will include critical updates on the nation’s economic outlook and fiscal policies. It is expected to address key issues such as tax reform, public spending, and initiatives aimed at supporting economic growth. The Budget will also include forecasts from the Office for Budget Responsibility (OBR), providing insights into the government’s economic strategies.

In his written statement, Exchequer Secretary James Murray MP, laid out the Government’s ‘priority tax commitments’ and planned next steps. In this article we’ve summarized these key fiscal priorities and relevant implications.

Labour’s priority tax commitments

Each of the government’s priority measures aims to reflect the government’s commitment to addressing fiscal challenges and ensuring a fairer tax system:

 Energy Profits Levy: The Energy Profits Levy will increase to 38% from November 1, 2024, extending its application until March 2030. This change raises the total corporate tax rate on oil and gas activities to 78%, demonstrating the government’s focus on capturing higher revenues from the energy sector.

Pillar Two Country-by-Country Reporting Safe Harbour: The UK will revise its implementation of the Pillar Two country-by-country reporting safe harbour rules, incorporating the OECD’s anti-arbitrage measures. This legislation aims to close loopholes used for tax avoidance and align with global tax reform efforts.

Private Schools VAT and Business Rates: The government has announced that starting January 1, 2025, private schools will be subject to a 20% VAT on education services, vocational training, and related boarding services. Fees paid after July 29, 2024, for education provided from January 2025 will also incur this VAT. Schools must register for VAT beginning October 30, 2024, with further HMRC guidance forthcoming. Additionally, the removal of business rates charitable relief for private schools in England will take effect in April 2025, pending parliamentary approval.

Carried Interest Reform: A call for evidence on the taxation of carried interest, open until August 30, 2024, suggests potential changes to how this income is treated, particularly in the private equity sector.

How Verallo can help

At Verallo, we prioritise guiding our clients through complex tax changes with confidence and clarity. Our team of experts works closely with both businesses and individuals to assess the impact of new tax policies on their financial strategies. We provide tailored advice, ensuring our clients are well-prepared to adapt and capitalise on opportunities that arise from these changes.

By staying ahead of regulatory shifts, we help our clients maintain compliance while optimising their tax positions.

For proactive, personalised tax planning, give us a call on 0203 912 9933, or email us at info@verallo.com.