Employment Tax & Global Mobility Tax

UK | Autumn Budget 2024

Key tax announcements impacting employers and employees

Summary

The Chancellor of the Exchequer delivered her Autumn Budget on 30 October 2024, setting out the UK government’s tax and spending plans. Our Autumn Budget summary for UK employers and employees, including global mobility considerations, is outlined below and includes:

• Key announcements
• Other announcements
• What we did not see

Key announcements

The two significant announcements were the confirmation of the reform of the tax rules for non-UK domiciled individuals and the increase to employer National Insurance, both of which will have implications for UK employers with globally mobile employees. From 6 April 2025 there is both an increase in the employers’ rate of National Insurance to 15%, and a reduction in the
Secondary Threshold (i.e. the amount of an employee’s earnings at which the employer begins to pay National Insurance) to £5,000, down from £9,100 pa this year.

Increases to the National Minimum/Living Wage were also announced from April 2025 and, for businesses affected, new rules on carried interest, first for 2025/26 and then a longer-term regime from April 2026.

As well as changes to income tax and National Insurance, there were also changes announced on inheritance tax, including that an individual will be subject to UK inheritance tax if they have been a UK resident for at least 10 out of the last 20 tax years before a chargeable event, such as death.

Non-domiciled taxpayers: abolition of the remittance basis of taxation and the
introduction of a new residence-based regime

A quick recap

Prior to this Autumn Budget, the Labour government had already announced plans to continue to take forward major changes to the UK taxation of foreign income and gains (“FIG”) from 6 April 2025. As a quick recap, the main headlines were:

• Abolition of the “remittance basis” of taxation for non-domiciled individuals.
• A new “FIG regime”, which allows inbound individuals to claim full relief from UK taxes on overseas income and gains for the first four years of tax residence, providing the individual has been not resident for 10 years prior to their arrival in the UK.
• A new tax regime for inheritance tax and tax changes to protected trusts.
• Individuals who are UK tax resident in 2025/26, and do not qualify for the new FIG regime, will be taxable on worldwide income and gains.
• Further details were awaited on overseas workday relief and transitional rules.
• Please see our original July 2024 news alert for more detail on the original announcements.

The new announcements

• The concept of domicile will be removed from the UK tax system. The residence-based FIG regime will still take effect from 6 April 2025. It has been confirmed that the new regime can apply to UK nationals and UK domiciled individuals who may not have previously had access to, or used, the remittance basis.
• Overseas workday relief will be available as a separate election for the first four years of UK tax residence provided an individual qualifies for the new FIG regime. However, the government is introducing a financial limit to the relief: the lower of 30% of qualifying employment income or £300,000 per tax year. The limit is complex as it relates to earnings
  relating to that tax year and is cumulative – so a performance bonus paid in a later year will have to be considered in light of the claim in a prior tax year.
• Those individuals who arrived in the 2023/24 or 2024/25 UK tax years and were eligible for overseas workday relief can continue to claim overseas workday relief for the remainder of the first three years of UK residence. However, if an individual also qualifies for the new FIG regime, they can claim overseas workday relief for an additional fourth year. Overseas workday relief in respect of 2025/26 and future tax years will be under the new regime; however, the financial limit will not apply. Please note there is an unwelcome complexity with trailing income: this will continue to be subject to the remittance basis rules and the government has advised that any trailing income relating to a pre-6 April 2025 period will still need to be paid into a qualifying bank account and be kept offshore to benefit from overseas workday relief.
• Individuals eligible for FIG will need to make three separate and independent choices of their annual UK tax return: a foreign income claim, a foreign employment election or a foreign gain claim. Any of the three claims will result in a loss of the individual’s annual exempt amount for capital gains tax and personal allowance for income tax. In addition, taxpayers can pick and choose what sources of foreign income and on which foreign gains to claim relief (it’s not all or nothing).
• Unlike the current non-dom regime, under FIG the taxpayer must also quantify and report the amount of foreign income and gains being excluded from UK tax each year. If amounts of FIG are not quantified and included in the return, then individuals will remain chargeable and subject to tax at their usual rates.
• A Temporary Repatriation Facility (“TRF”) will be available for people with previous unremitted income or gains from before 6 April 2025. It will run for three years until 5 April 2028. Individuals can designate previously untaxed and unremitted FIG which will be charged to tax at 12% in 2025/26 and 2026/27, and 15% in 2027/28. The person must be a UK tax resident in the year of making the designation, but the taxed amounts need not be brought into the UK in that tax year. It will not be possible to claim relief for foreign tax against the charge. Individuals can designate any amount: it could even include clean
  capital amounts. The government is also simplifying the rules around mixed funds to allow designated funds to be remitted first.
• For current and former remittance basis users, they will be able to rebase foreign assets from 5 April 2017. This means that only capital gains arising from the value at this date will be subject to UK tax on sale from 6 April 2025.
• In a welcome simplification, from 6 April 2025 an employer can notify HMRC of their intention to exclude a proportion of a qualifying employee’s relevant pay from PAYE and only operate PAYE on earnings relating to work in the UK. Unlike the former (section 690) process, this will be a “process now, check later” system, and the PAYE exclusion can operate once an employer has received an auto-acknowledgement of their notification from HMRC.
• There have also been significant changes to the rules regarding inheritance tax and trusts, which are covered separately below.

Vialto View 6 April 2025 is rapidly approaching and individuals and employers have been eagerly awaiting clarifications from the Labour government on the proposed new FIG regime. The government has published guidance and legislation, but the devil is in the detail and a lot of additional complexity has now been introduced that taxpayers will need to navigate. The first welcome clarification is that it has been confirmed by HMRC that returning UK-domiciled expatriates who have been non-resident for 10 years will be eligible for the new regime – a great incentive. We also welcome the simplification of overseas workday relief to allow relief in the UK for up to four years (in line with the wider FIG regime). However, enthusiasm is tempered by the additional complexity and potential cost that HMRC has introduced in terms of an annual financial limit in the relief per tax year and complexities regarding trailing income. This, combined with the new requirement to quantify and report worldwide income and gains on every tax return (regardless of whether the amounts are ultimately taxable), will increase UK tax return complexity. There will also be some disappointment that the government failed to reform the way in which overseas workday relief is applied, and many would have preferred a fixed percentage regime. In addition, we suspect that HMRC will heavily focus on the remittance basis and overseas workday relief in tax return enquiries for relevant years impacted by the old regime. The government is still looking to tax remittances to the UK of foreign income and gains that arose pre 6 April 2025, at an initial rate of 12%. The government has published a lot of information on how to designate and the impact on bank account structuring. Impacted taxpayers will need to carefully assess the overall tax position and whether they wish to designate an amount to bring in. For employers, the changes will have a significant impact on globally mobile employees in the UK. Assignment policies and tax equalisation policies will need to be reviewed in light of the potential changes on the taxation of both personal income and the wider availability of overseas workday relief. For upcoming assignments to the UK, employers and employees may wish to consider the optimal start date to take advantage of the new FIG rules from 2025/26. For expatriates currently in the UK, this is a very significant change that will need to be communicated so they can understand and review the impact on their own affairs from 6 April 2025. For employees who have received tax advice or a UK tax briefing supported by their employer, it’s important to note that these messages will now be out of date from 6 April 2025, so consideration will be needed as to how and when to update those employees on the significant changes.

Employers’ National Insurance rate increased from 13.8% to 15%

The rate of employers’ National Insurance (“NIC”) will increase from 13.8% to 15% from 6 April 2025. This will apply to:

• Secondary Class 1 NIC (broadly payable on an employee’s earnings from the employment);
• Class 1A NIC (payable on benefits in kind provided to employees, termination payments exceeding £30,000 and on sporting testimonials in excess of £100,000); and
• Class 1B NIC (payable on items included in a PAYE Settlement Agreement).

In addition to the above, the Secondary threshold (“ST”) (the point at which employers broadly start paying Class 1 Secondary NIC) will reduce from £9,100 per year to £5,000 from 6 April 2025. For employees earning over the current ST, this will create an additional annual cost of £615 per employee for employers (at the new NIC rate), in addition to the extra costs due to the increase in Class 1 Secondary NIC rates.

To offset some of the additional cost to employers the Chancellor announced that, from 6 April 2025:

• The Employment Allowance (the maximum amount eligible employers can save in employer NIC each year) will increase from £5,000 to £10,500.
• The restriction that currently applies whereby only employers who have incurred a secondary Class 1 NIC liability of less than £100,000 in the tax year prior are able to claim will also be removed from this date.

The Chancellor also announced increases in the Lower Earnings Limit (“LEL”) (to a total of £6,500 per annum) and to Class 2 and 3 NICs, in line with the Consumer Price Index (“CPI”) in September 2024 (1.7%). The LEL is the amount an employee must earn within NIC to gain a qualifying year towards the state pension.

Vialto View Employers need to ensure that payroll systems are updated to reflect these changes ahead of any April 2025 payroll runs. As with any changes, we would always recommend written guidance and guarantees this will happen ahead of the new tax year and that employers undertake testing following any system changes. These measures, alongside the announced increases to the National Living/Minimum Wage (see below) will place a further cost burden on businesses, and could cause businesses to consider reducing the workforce, limiting pay rises/bonuses/benefits and/or restricting investment in the workforce. This increase will also further exacerbate the difference in NIC paid in relation to employees and the self-employed (in particular those engaged via personal service companies) and the costs of getting this wrong will be greater. Many businesses will welcome the changes to the Employment Allowance, albeit care will need to be taken to ensure that the eligibility criteria is met. In our experience, this was a common error across employers of all sizes and employers will need to review the eligibility criteria, particularly where they run multiple payrolls and/or are connected to other employers. The reduction in the ST will have a greater effect on the lower paid than the higher paid. The extra cost for employers represents over 3% of the basic wages for an employee working 37.5 hours per week at the new National Living Wage of £12.21 per hour, but the effect of reducing the ST would be much less pronounced relative to the salary of a highly paid employee. For a very highly paid employee, the much stronger effect is the 1.2% increase in the NIC rate. For individuals earning between the reduced ST of £5,000 and the increased LEL of £6,500, there appears to be an anomaly whereby Class 1 Secondary NIC is due without an individual gaining any qualifying years towards the State Pension. The decision not to extend employer NIC to employer pension contributions at this time is to be welcomed. This would likely have been a material additional cost to many businesses and may have led to reduced employer pension contributions over time, which would seem a backward step following the introduction of pension auto-enrolment. This would also have added a layer of complexity and would have severely limited the benefit of pension salary sacrifice arrangements. Whether the government may reconsider this in future fiscal events remains to be seen. That said, organisations where employees are paying member contributions to pension schemes and who have not implemented pension salary sacrifice might want to consider doing so, because this might in part help to mitigate some of the extra costs of the NIC increases. From a global mobility perspective, employers should consider the impact on the total costs for any assignments where employer NIC costs are a factor. Employers may wish to update cost projections and/or notify the business of the increased rate. From an Employment Related Securities (“ERS”) perspective, employees could see an impact from this increase. For those companies where they have a joint election in place with employees to shift the employer NIC obligation to the employees (NIC shifting) on income such as RSUs or stock options, then employees will see more of their income reduced for taxes. Previously the highest withholding rate these individuals may have seen on their ERS income was 54.59%, this will now increase 0.66% to 55.25%. This NIC shifting already leaves many employees questioning the benefit of the ERS income they receive, so this may lead to more employee dissatisfaction on this point.

Carried interest

Carried interest is a form of performance-related reward received by fund managers, primarily within the private equity industry. Unlike other such rewards, carried interest can currently be taxed at capital gains tax (“CGT”) rates of 18% and 28% where certain conditions are met.

The tax treatment of carried interest has been the subject of considerable debate and, following the government’s recent call for evidence, changes to the treatment of carried interest have been announced to appropriately reflect, in the government’s view, the economic characteristics of carried interest and the level of risk assumed by fund managers in receipt of it.

For 2025/26, carried interest will continue to be taxed within the CGT regime but the tax rate will be increased to 32%. However, from 6 April 2026, carried interest will be taxed fully within the income tax framework, with bespoke rules to reflect its unique characteristics.

Under the new income tax regime from April 2026, carried interest will be treated as trading profits and subject to income tax and Class 4 NIC, i.e. like self-employed profits. However, reflecting the characteristics of the reward, the amount of ‘qualifying’ carried interest subject to tax will be adjusted by applying a 72.5% multiplier. This will be complex legislation to get right, so the
government will consult and engage with expert stakeholders on it.

To the extent that investment management duties are performed outside the UK, it has been possible for non-UK domiciled individuals to exempt from UK tax the portion of carried interest relating to such overseas duties. This will still be possible; however, the relief will only be available for the first four years, in line with the new FIG regime.

The government also plans to remove the ERS exclusion to ensure the Income-based carried interest (“IBCI”) rules apply fairly to all fund managers regardless of their employment status.

The government currently has no plans to change the tax treatment of co-investment.

Vialto View Labour’s manifesto made clear that, if elected, the party would tax carried interest as income, but was careful not to box itself in too tightly on how to achieve this. A bespoke regime for carried interest fulfils the manifesto promise, and taxing 72.5% of profits at 45% (the typical marginal income tax rate for someone receiving substantial carried interest) would give a tax rate of 32.6%, plus Class 4 NIC. This then explains the new special CGT rate of 32% to be imposed for one year only in 2025/26. The 32.6% rate balances a desire to raise more tax revenue from this sector of the economy, with a need to keep a competitive tax regime where the top participants can be highly mobile and might move their business bases outside the UK. This is a niche area of tax, affecting only a small population, but calibrating the tax regime correctly will be important for those that it does affect.

Mandatory payrolling of benefits

The government confirmed that payrolling benefits in kind will become mandatory, in phases, from April 2026. Whilst much of the technical detail is to be considered, key points are that:

• All benefits, with the exception of employment related loans and living accommodation, will be mandated to be reported via the payroll from April 2026 for both income tax and Class 1A (employer only) NIC purposes.
• Employers may register to voluntarily payroll loans and accommodation from April 2026; otherwise, the Form P11D and P11D(b) process will remain for these items. The government will set out steps to mandate the payrolling of these benefits in due course.
• Whilst HMRC expects the taxable values for most items to be reported accurately, an end of year process will be introduced to amend the taxable values of any items that cannot be determined during the tax year.
• It is expected that additional data or a granular breakdown of benefits provided will need to be reported via the payroll.
• HMRC is still developing solutions to ensure that mandatory payrolling of benefits works for certain specific parts of the population such as globally mobile employees, so it remains to be seen how this change will impact mobile workers.
• HMRC will monitor the penalty position for 2026/27, recognising the first year will inevitably require adjustment for many employers.

Further technical detail and draft legislation are expected in 2025 and we look forward to liaising with HMRC to discuss and understand how these measures will apply to more complex scenarios, including globally mobile workers. In addition to the above, the government confirmed that previous commitments made that the official rate of interest (“ORI”) used to calculate the taxable value of employment related loans and living accommodation would not be increased during a tax year will no longer be applicable. As of 6 April 2025 the ORI may increase, decrease, or be maintained throughout the year. The rate will continue to be reviewed on a quarterly basis and any changes in the rate will occur following a quarterly review, where appropriate. This is likely to add even more complexity to payrolling these items, which might deter many employers from voluntarily registering to payroll these.

Vialto View Whilst confirmation that there will be a phased introduction is to be welcomed, the April 2026 deadline may still be somewhat ambitious, particularly as regards more complex benefits and scenarios, for example the treatment of qualifying relocation in excess of £8,000 and globally mobile employees more generally. It is likely employers will have little time following the publication of any detailed guidance to review current processes and assess what changes will be needed. Equally, software developers will likely have limited time to build relevant changes into payroll software, with payroll providers potentially having even less time to review and familiarise themselves with any changes to both the software and processes. At this point in time we do not expect an extension to this date and careful planning and consideration should be given now to the impact of these changes to both employees and previous processes. Employers should undertake a review of current benefits provided to employees and liaise with their payroll providers to ensure they are prepared for the changes ahead and understand what changes will be / are being made to accommodate these changes. Once further detail is provided, processes will need to be updated to reflect this change, including ensuring any additional information required by HMRC is captured and included in the relevant payroll reporting. Employers who have not yet voluntarily registered to payroll benefits may want to consider voluntarily registering to payroll some benefits for the 2025/26 tax year (registrations must be made no later than 5 April 2025) to enable processes to be developed ahead of this becoming mandatory. Any employers considering this should start the process as soon as possible to ensure that they are prepared ahead of 6 April 2025.

National Living Wage increased from £11.44 an hour to £12.21 an hour and the
gap between the National Living Wage and the National Minimum Wage has
narrowed

The National Living Wage (“NLW”) will increase from 1 April 2025 from £11.44 an hour to £12.21 an hour (an increase of 6.7%).

With effect from 1 April 2025, National Minimum Wage (“NMW”) rates have been increased as follows:

• Age 18 to 20: £10.00 (up from £8.60, an increase of 16.3%)
• Under 18 and Apprentices: £7.55 (up from £6.40, an increase of 18%)

Vialto View As part of the new government’s focus on workers’ rights and pay, the Low Pay Commission (“LPC”) was tasked to reflect the cost of living in any rates set and balance this with the impact on businesses, the labour market and the wider economy. The announced rises follow a significant rise to the value of the rates in April 2024 and marks a step towards the government’s aim to have a single rate for all working adults. Businesses will need to take the changes into account when considering pay rates/ bandings and potential pay increases to both ensure that workers are paid at least the NLW/NMW and consider whether this gives appropriate head room to cover, for example, additional hours worked unpaid by salaried workers, items that need to be deducted for NLW/NMW purposes, etc. Businesses may want to consider the impact of a future single rate for adult workers when considering the direction of future rates/bandings. Businesses which operate salary sacrifice arrangements should further consider any potential or future impacts on employees’ ability to participate and whether relevant processes should be reviewed or refreshed. Given the value of the sacrifice and the fact leases span a number of years, complexities often arise in respect of salary sacrifice arrangements in relation to company cars. In addition to NLW/NMW considerations, businesses may want to take the opportunity to consider wider employee affordability and whether any minimum pay threshold should be introduced/reviewed. A full review of all hourly rates should be undertaken to ensure the new changes will not result in a breach or impact employees. Many payroll systems hold hourly rates and these will need to be reviewed or updated if not automatically done. Where available, a report should be pulled from the system showing all salary salary/hourly rates and salary sacrifice amounts which could impact the new NLW/NMW requirements.

Inheritance tax – general changes

The nil-rate Inheritance tax (“IHT”) bands are to be fixed at current levels until 5 April 2030. The nil-rate band will therefore continue to be £325,000 and the residence nil-rate band of £175,000 is retained (tapered after £2 million).

The Chancellor has however announced reforms that include inherited and unused pensions becoming subject to inheritance tax, with additional reforms affecting Agricultural Property Relief (“APR”), Business Property Relief (“BPR”), and AIM-listed shares.

The government will also bring unused pension funds and death benefits payable from a pension into a person’s death estate, to
be subject to inheritance tax, from 6 April 2027.

Under the new rules, the first £1 million of combined business and agricultural assets will remain exempt from inheritance tax. Assets exceeding this threshold will incur inheritance tax with a 50% relief, resulting in an effective 20% tax rate on APR and BPR assets above £1 million.

IHT changes for Non-UK Doms / Non-UK Residents

Significant changes to IHT rules for non-domiciled individuals will take effect from 6 April 2025. These changes are being introduced sooner than anticipated under the previous government’s timeline.

As of 6 April 2025, the concept of domicile will no longer apply to determine IHT liability. Instead, an individual will be subject to UK IHT if they have been a UK resident for at least 10 out of the last 20 tax years before a chargeable event, such as death.

Currently, offshore trusts holding non-UK assets are exempt from IHT if the settlor was non-domiciled at the time the trust was established. However, this protected status will end under the new rules. For trusts settled by a long-term UK resident non-domiciled settler, any previously excluded property will become relevant property on 6 April 2025. Exit charges will apply after this date or on each ten-year anniversary of the trust, effectively bringing settlor-interest trust assets within the scope of IHT alongside directly owned assets if the settlor meets the long-term residence requirement.

Transitional rules will apply to non-domiciled individuals who are non-resident in the 2025/26 tax year. For individuals who break UK residence, the period (or “Tail”) they remain within the scope of UK IHT will depend on their residence history over the past 20 years. Those with 10 to 13 years of UK residency will remain in scope for three years, with an additional year added for each year of
residence beyond that. Once an individual has been non-resident for 10 consecutive years, they will be outside the scope of UK IHT on non-UK assets.

Other announcements

• Thresholds, bands and allowances for income tax and National Insurance: Thresholds, bands and allowances for income tax are currently frozen until April 2028. The Chancellor confirmed that this freeze will not be extended (as had been rumoured) and these will again rise from 6 April 2028.
• Capital Gains Tax:
  • The main rates of CGT will increase from 10% and 20% to 18% and 24% respectively. The change will take effect for disposals made on or after 30 October 2024. No changes have been made to the rate for residential property (currently 18% / 24%).
  • The rate of CGT for Business Asset Disposal Relief and Investors’ Relief is increasing to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026.
  • The Investors’ Relief lifetime limit will be reduced from £10 million to £1 million for Investors’ Relief qualifying disposals made on or after 30 October 2024.
• Tackling tax non-compliance in the umbrella company market: From April 2026, agencies will be responsible for accounting for PAYE on payments made to workers that are supplied using umbrella companies. Where there is no agency, this responsibility will fall to the end client business. Draft legislation will be published in due course.
• VAT of school fees for international schools: There were representations that international schools in the UK that follow another country’s curriculum, and which cater for children of expatriate parents, should be excluded from the new rules that will impose VAT at 20% on private school fees from January 2025. However, the government has confirmed that these international schools will be subject to VAT on fees. To recap, VAT on private school fees is being introduced from 1 January 2025.
• Company car tax rates: The government announced company car tax rates for 2028/29 and 2029/30:
  • Appropriate percentages for zero emission and electric vehicles will increase by 2 percentage points per year in 2028/29 and 2029/30, rising to an appropriate percentage of 9% in 2029/30.
  • Appropriate percentages for all cars with emissions of 1 to 50g of CO2 per kilometre, including hybrid vehicles, will rise to 18% in 2028/29 and 19% in 2029/30.
  • Appropriate percentages for all other vehicle bands will increase by 1 percentage point per year in 2028/9 and 2029/30. This will be to a maximum appropriate percentage of 38% for 2028/29 and 39% for 2029/30.
  • For 2025/26 the car fuel benefit charge multiplier will be £28,200.
• Company van rates: The government will increase the van benefit charge and the car and
  van fuel benefit charges using the September 2024 CPI. For the 2025/26 tax year:
  • the van benefit charge will be £4,020
  • the van fuel benefit charge will be £769
• Employee car ownership schemes (“ECOS”): With effect from 6 April 2026, legislation will be introduced to close loopholes in ECOS arrangements to prevent them from being used to circumvent the company car tax benefit in kind charge.
• Double cab pick ups:
  • The government will not introduce legislation to maintain the treatment of double cab pick-up vehicles with a payload of one tonne or more as goods vehicles.
  • HMRC is updating guidance to clarify the position in respect of such vehicles, which will be treated as cars for capital allowances, for benefits in kind and for some deductions from business profits. Transitional arrangements will also apply.
• High Income Child Benefit Charge (“HICBC”): The government will not proceed with the reform to base the HICBC on household incomes. Instead, employed individuals will be able to report child benefit payments through their tax code from 2025, and pre-populate Self Assessment tax returns with child benefit data for those not using this service.
• National Insurance relief for hiring veterans: The government is extending the employer NIC relief for employers hiring qualifying veterans for a further year from 6 April 2025 until 5 April 2026.
• Tackling tax avoidance and closing the tax gap:
  • The government confirmed an increase in spending to tackle tax avoidance and evasion, providing HMRC with 5,000 more staff to deal with both cases of serious tax fraud and addressing tax compliance risks among wealthy taxpayers.
  • They will also increase the interest rate on overdue tax bills by 1.5% from 6 April 2025 (i.e. to the Bank of England base rate plus 4%). HMRC anticipates that these changes will yield additional revenue of £6.5bn over the next five years.
  • The government will publish a consultation in early 2025 on a package of measures to tackle promoters of marketed tax avoidance, including new powers focussed on those who own or control promoter organisations and new options to tackle legal professionals behind avoidance schemes.
• Consultations and calls for evidence: The government has published:
  • Personal tax offshore anti-avoidance rules: A call for evidence on the personal tax offshore anti-avoidance rules, seeking to understand and identify areas where the personal tax offshore anti-avoidance rules could be improved or updated.
  • Simplifying the taxation of offshore interest: The government announced a consultation seeking views on how the taxation of offshore investment income can be simplified to help reduce administrative burdens for taxpayers and improve compliance. With the abolition of the non-dom regime, more taxpayers might need to report offshore interest each year.
  • New ways to tackle tax non-compliance: The government has published a consultation on reforming HMRC’s correction powers, exploring changes to HMRC’s existing powers and processes, and a potential new power to require taxpayers to correct mistakes themselves.
  • The government also intends to publish a consultation in early 2025 on options to enhance HMRC’s powers and sanctions to take swifter and stronger action against tax advisers who
    facilitate non-compliance.
• Corporation tax: Corporation Tax will be capped at 25% for the duration of the Parliament.
• UK savings: Annual subscription limits will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030.
• Freeports and Investment Zones: The government will continue with the freeports and investment zones programmes.

What we did not see

As well as the announcements made in the Autumn Budget, there were other possible announcements that were noticeable by their absence. Some of the possible tax changes that had been discussed before the day, but which were not mentioned include:

• Employer NIC extended to employer pension contributions: It is understood the government considered introducing this (with the government funding the extra cost for public sector organisation) but decided against it in the current Budget, likely to the relief of many employers and advisers, particularly those operating pension salary sacrifice.
• Restricting tax relief on pension contributions: Consideration was seemingly given to restricting tax relief on pension contributions to a fixed percentage,e.g. 30%, with a view to limiting the level of relief awarded to higher earners. A number of pension commentators noted that this could be complex to operate, including for public sector defined benefits schemes.
• Reduction in the pension tax-free cash sum: The almost annual rumours that the amount of tax-free cash that could be taken from a registered pension scheme at retirement would be reduced did not come about. The tax-free cash rules remain as before.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively one of our technical experts:

Ash Majithia
Partner

Sarah Hewson
Employment Tax

Jenny Adams
Global Mobility

Gemma Ludwig
Global Equity and Reward

Tim Sexton
Pensions

Ian Robinson
Immigration

Further information on Vialto Partners can be found here: www.vialtopartners.com

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