Tax update March 2024: Spring Budget and NIC cuts

The latest tax developments and VAT round-up for the month.

Silverthrone tax digest covers the developments most likely to affect individuals, trusts, estates and businesses. If you would like to discuss anything here in more detail, please get in touch with your usual contact.

1. Private client

1.1 Spring Budget: the main changes for individuals

The Spring Budget on 6 March 2024 eased the high income child benefit charge, cut the higher rate of capital gains tax on residential property and announced the end of the non-dom regime.

From 6 April 2024 the high income child benefit charge will only start once adjusted net income passes £60,000, rather than £50,000, and the benefit will not be fully clawed back until income reaches £80,000. On the same date the higher rate of capital gains tax on residential property falls from 28% to 24%, while the remittance basis for non-UK domiciled individuals is to be replaced from 6 April 2025 by a residence-based regime, with a four-year exemption for foreign income and gains of new arrivals; that change went ahead from 6 April 2025. Families just above the new child benefit thresholds can often reduce the charge through pension contributions or Gift Aid, so please review your plans before the new tax year starts.

1.2 Child benefit charge assessments cancelled

The First-tier Tribunal has cancelled high income child benefit charge assessments and penalties because HMRC could not show which officer had made the discovery behind them.

Mr Brown, an employee taxed under PAYE, did not know about the charge, and HMRC assessed him for 2014/15 to 2017/18, charging just under £4,000 plus penalties. The tribunal held that a discovery must be made by an individual officer, and HMRC’s evidence did not establish who that was; it also found that some years were out of time and that Mr Brown had a reasonable excuse for failing to notify HMRC. If you receive a child benefit charge assessment, ask us to review it promptly, as the time limit for appealing is 30 days.

Paul Brown v HMRC [2024] UKFTT 245 (TC)

1.3 Glencore payments from share premium taxed as income

The Upper Tribunal has agreed that payments a UK resident shareholder received out of Glencore’s share premium account were taxable dividends rather than capital.

Glencore is incorporated in Jersey, where company law allows distributions to be paid out of share premium. Mr Beard received such payments in each tax year from 2011/12 to 2015/16 and argued that they were capital, but the tribunal held that it is the legal mechanism used to make a distribution, not the source of the funds, that decides whether it is income. Shareholders in overseas companies should not assume that a payment described as a return of capital escapes income tax in the UK. Please note that the Court of Appeal dismissed Mr Beard’s further appeal in May 2025.

Alexander Beard v HMRC [2024] UKUT 73 (TCC)

1.4 Entrepreneurs’ relief lost because the deal came too late

The First-tier Tribunal has refused entrepreneurs’ relief on the transfer of a nursery business to its owner’s company, because no binding contract existed before the rules changed on 3 December 2014.

Ms Delaney ran two nurseries as a sole trader and took advice from 2011 about incorporating, but the business did not pass to her company until September 2015. From 3 December 2014 relief was restricted where goodwill was transferred to a company controlled by the seller, and the tribunal found that the earlier discussions lacked the certainty needed for a contract, so the transitional rules did not help her. Anyone relying on a key date for business asset disposal relief needs clear written evidence of when a deal became binding, and we can help you plan a sale well in advance. Please note that the Upper Tribunal refused Ms Delaney permission to appeal in January 2025.

Frances Delaney v HMRC [2024] UKFTT 214 (TC)

2. PAYE and employment

2.1 National Insurance cut again from 6 April

The main rate of employee Class 1 National Insurance will fall from 10% to 8% from 6 April 2024, and the main Class 4 rate for the self-employed from 9% to 6%.

This follows the cut to 10% in January and the changes for the self-employed announced in the Autumn Statement, which also end compulsory Class 2 contributions from 6 April 2024. Employer contributions stay at 13.8%. Employers should check that their payroll applies the new rate from the first pay day of the new tax year.

2.2 Footballer’s agent fees not deductible

The First-tier Tribunal has ruled that a Premier League footballer could not deduct the fees paid to his agent on his transfer from his employment income.

Baye Oumar Niasse moved from Lokomotiv Moscow to Everton in February 2016, and Everton paid his agent on his behalf in 2015/16 and 2016/17. The tribunal held that the fees were paid to obtain the job rather than in performing its duties, and that a footballer is not an entertainer who can use the special deduction for agency fees available to actors, musicians and similar performers; late filing penalties were also upheld. The decision is consistent with an earlier case on football agents’ fees, and employees should assume that the cost of finding or changing a job is not tax-deductible.

Baye Oumar Niasse v HMRC [2024] UKFTT 179 (TC)

3. Business tax

3.1 Merged R&D scheme confirmed from 1 April 2024

Regulations made on 4 March 2024 confirm that the merged research and development relief scheme applies to accounting periods beginning on or after 1 April 2024.

The merger of the R&D schemes replaces the separate SME and large company regimes with a single expenditure credit, while loss-making companies that are R&D intensive can claim enhanced support instead. A company whose accounting period began before 1 April 2024 continues to use the old rules for that period. HMRC is scrutinising claims closely, so please speak to us before preparing your next claim.

3.2 Furnished holiday lettings regime to end

The Spring Budget announced that the special tax treatment of furnished holiday lettings will be abolished from April 2025.

Holiday let owners can currently claim capital allowances and full relief for finance costs, count their profits as earnings for pension purposes, and access capital gains tax reliefs such as business asset disposal relief, none of which ordinary residential landlords enjoy. Once the regime ends, holiday lets will be taxed like other residential lettings, and anti-forestalling rules from 6 March 2024 stop owners using unconditional contracts to secure the old reliefs. The abolition went ahead from 6 April 2025 for income tax and 1 April 2025 for corporation tax, so holiday let landlords should review their ownership and finance arrangements.

3.3 Seeking planning permission did not make a property company a trader

The First-tier Tribunal has held that a company that obtained planning permission to add value to a West London site was an investment company, so its shareholders could not claim entrepreneurs’ relief.

Stolkin Greenford Limited bought the former GlaxoSmithKline headquarters in 2011 as an investment, appropriated part of the site to trading stock in December 2013, obtained planning permission and sold that land in December 2015 before being liquidated. The tribunal accepted that there was a profit motive, but found that obtaining planning consents, however extensive, was management of an investment rather than a trade. Shareholders in property companies should take advice well before a sale or liquidation on whether relief is likely to be available.

Mark Stolkin and others v HMRC [2024] UKFTT 160 (TC)

4. VAT and indirect taxes

4.1 VAT registration threshold rises to £90,000

From 1 April 2024 the VAT registration threshold rises from £85,000 to £90,000, and the deregistration threshold from £83,000 to £88,000.

This is the first increase since April 2017. Businesses near the limit should keep checking their taxable turnover over each rolling 12-month period, and registered businesses whose turnover is expected to stay below £88,000 may be able to deregister. Before doing so, consider whether you would lose valuable input VAT recovery.

4.2 Fruit and nut bars are confectionery

On a rehearing, the First-tier Tribunal has again decided that Nakd and Organix fruit and nut bars sold by Morrisons are standard-rated confectionery rather than zero-rated food.

The Upper Tribunal had sent the case back in 2023 so that the tribunal could weigh the bars’ healthy image and the absence of traditional confectionery ingredients such as sugar, butter and flour. A new panel considered those points but still found that the bars’ appearance, texture and taste made them confectionery. Food businesses should not assume that a healthy product is zero-rated, as the poppadom case in our January update also showed.

WM Morrison Supermarkets plc v HMRC [2024] UKFTT 181 (TC)

4.3 Hospital car parking: NHS trust wins in the Court of Appeal

The Court of Appeal has held that an NHS foundation trust provided hospital car parking as a public authority, so it did not have to charge VAT on its parking fees.

Northumbria Healthcare argued that it ran its car parks under a special legal regime because of Department of Health guidance on parking charges. The court agreed, and found that HMRC had not shown that treating the trust as a non-taxable person would distort competition with private car park operators; we looked at the decision in more detail here. Please note that the Supreme Court allowed HMRC’s appeal on 29 October 2025, holding that guidance does not create a special legal regime, so the trust’s car parking charges are subject to VAT after all.

Northumbria Healthcare NHS Foundation Trust v HMRC [2024] EWCA Civ 177

4.4 Multiple dwellings relief to be abolished

The Spring Budget announced that stamp duty land tax multiple dwellings relief will be abolished for transactions with an effective date on or after 1 June 2024.

The relief let buyers of more than one dwelling in a single transaction work out SDLT by reference to the average price per dwelling, but the government said it had attracted incorrect and abusive claims. Contracts exchanged on or before 6 March 2024 can still benefit, even if completion is later, provided they are not varied after that date. Investors buying a portfolio, or a house with an annexe, should allow for the higher cost in their offers.

5. Key dates

The main deadlines and events for March to May 2024 are set out below.

Date Deadline or event Who it affects
6 Mar Spring Budget 2024 delivered by the Chancellor All →
22 Mar PAYE, NIC and CIS electronic payment for the month to 5 March Employers →
1 Apr Corporation tax due for year ended 30 June 2023 (1 April is Easter Monday, so pay by Thursday 28 March); VAT registration threshold rises to £90,000 Companies →
5 Apr Last day of the 2023/24 tax year: final chance to use this year’s ISA allowance and £6,000 capital gains tax annual exempt amount Individuals →
6 Apr New tax year: employee NIC main rate 8%, Class 4 main rate 6%, CGT annual exempt amount £3,000, child benefit charge threshold £60,000 Individuals →
6 Apr Higher rate of capital gains tax on residential property falls from 28% to 24% Landlords →
22 Apr PAYE, NIC and CIS electronic payment for the month to 5 April Employers →
1 May Corporation tax due for year ended 31 July 2023 Companies →
31 May Deadline to give employees their 2023/24 P60s Employers →

6. And finally

6.1 Husbands and wives taxed separately

On 15 March 1988, Chancellor Nigel Lawson used his Budget to announce that married women would be taxed independently of their husbands from April 1990. Until then, a married woman’s income had been treated as her husband’s for tax purposes, an approach that dated back to the 19th century.

The same Budget cut the top rate of income tax from 60% to 40% and the basic rate from 27% to 25%, and the sitting was briefly suspended amid uproar in the Commons. Independent taxation gave every individual their own personal allowance, which is why each spouse today has their own allowances and rate bands.