Tax measures to bring economic stability and grow the economy
have today (Thursday 7 November 2024) been enshrined through the
publication of the Finance Bill 2024-25.
At last week's Budget the Chancellor set out the pillars of the
government's plan for growth, including the focus on high growth
sectors. The Bill supports the delivery of the plan through key
tax changes in the UK's creative, clean energy and financial
services industries.
The Creative Industry will get a £295m boost in tax savings to
productions using visual effects, solidifying the U.K. as a
global hub for film and TV. The Bill means that, from 1 April
2025, UK companies will be able to claim an enhanced 39% rate of
Audio-Visual Expenditure Credit and UK visual effects costs will
be exempt from the Audio-Visual Expenditure Credit's 80% cap on
qualifying expenditure.
To support the growth of the electric vehicle industry, the Bill
also supports the switch to EVs. It will extend the availability
of First Year Allowances – enabling companies to deduct 100% of
the cost of qualifying equipment from profits before tax – on new
zero-emission cars and plant or machinery for electric vehicle
(EV) charge-points. This will be extended to 31 March 2026 for
corporation tax purposes, and to 5 April 2026 for income tax
purposes.
Changes also support innovation in UK markets and encourage
growth by improving a new type of trading platform, the Private
Intermittent Securities and Capital Exchange System (PISCES). It
allows private companies to trade their equity in ways similar to
publicly listed companies helping them scale-up on their journey
to IPO.
The Chancellor of the Exchequer , said:
“Growth is our number one mission – and it depends upon
stability.
“We've taken difficult decisions to restore that stability and
now we're going for growth.”
Exchequer Secretary to the Treasury, , said:
“Last week's Budget was a generational moment to wipe the slate
clean by restoring economic stability and fixing the public
finances, so that we can get on with our number one mission of
growth.
“The Finance Bill will begin laying new paths to growth for key
sectors with tax reliefs across film and TV, electric vehicles,
and financial services.”
The Budget also set out the difficult decisions taken to fix the
foundations and restore stability to the public finances, helping
address the £22 billion fiscal hole inherited by the government.
The Finance Bill legislates for some of these difficult choices:
- This includes the manifesto pledges for the VAT break on
private school fees to end, closing the loopholes in the non-dom
tax regime, increasing and extending the Energy Profits Levy, and
beginning the process of reforming the tax treatment of carried
interest by increasing the applicable rates of Capital Gains Tax
(CGT).
- It also increases the CGT main rates from 10% to 18% for
those paying the lower rate, and 20% to 24% for those paying the
higher rate. The rate for Business Asset Disposal Relief and
Investors' Relief will increase to 14% from 6 April 2025, and
will increase again to match the lower main rate at 18% from 6
April 2026. These rate changes are expected to raise £2.5 billion
by 2029-30, helping repair the public finances while maintaining
the lowest headline CGT rates of any European G7 country.
- In a move estimated to result in 130,000 additional
transactions over the next five years by first-time buyers or
home movers, the Bill legislates for increasing the Higher Rates
for Additional Dwellings on Stamp Duty Land Tax by 2 percentage
points from 3% to 5%.
- Balancing public health objectives, cost of living pressures
and the cultural importance of British pubs, the government will
uprate alcohol duty on non-draught products in line with RPI,
whilst cutting duty rates for draught products, taking a penny of
duty off an average strength pint.
- The Bill also simplifies alcohol duty by legislating for the
alcohol duty stamps scheme to end from 1 May 2025, reducing the
administrative burden on spirit producers and importers,
including Scotch Whisky distilleries.
Notes to editors
- For a full list of measures included in today's Finance Bill
2024-25, please see here.
- The changes to employer National Insurance, which will take
effect from April 2025, are being legislated through a separate
Bill which will be introduced in due course.
FINANCE BILL 2024/25
EXPLANATORY NOTES
