Child Benefit
A long awaited adjustment to the system for phasing out Child Benefit for higher earners has been announced. The measure was first introduced in January 2013 and results in the benefit being lost where one earner in the household has income over £60,000, with a phasing out of benefit between £50,000 and £60,000.
This has resulted in a long standing anomaly which means that where a family has one person earning £60,000 and the other not working, they get nothing, whereas a family with two people earning £50,000 get the full benefit. In addition, the £50,000 threshold has remained unchanged – had it increased in line with rising costs it would now be £68,000.
Reforming this anomaly will take time to design a new scheme based on “household” income as this information is not easy to capture with current systems. The new system is intended to come into play in April 2026, but in the meantime the threshold and taper band are being uplifted to smooth the transition and help the current distortion.
From April 2024, full Child Benefit is available to any household where the higher earner has income of up to £60,000. Above this level, the benefit is tapered on a straight line basis until income hits £80,000.
In practical terms, families that have previously opted out of Child Benefit because of the charge, but will now be able to keep some of it, need to take action by 6 July 2024 to claim the full benefit, because it can only be backdated three months.
The government state that this change will have a positive impact for around 485,000 families. It is also hoped it might encourage more into work.
Stamp Duty Land Tax
Multiple Dwellings Relief for SDLT is being abolished with effect from 1 June 2024. This relief was introduced in 2011 and applies where a buyer purchases 2 or more dwellings in a single transaction, and allows them to calculate the duty based on the average value of the dwellings.
The objective of the relief was originally to reduce a potential barrier to investment in residential property and to promote private rented sector housing supply. However a government review found that the relief was having a minimal impact on housing supply, and it is therefore being abolished due to not meeting its original policy aims.
Any purchases which complete (or substantially perform) before 1 June 2024 will still qualify for relief. Any purchases which exchanged contracts on or before Budget Day (6 March 2024) will still qualify no matter when they complete.
Theatre, orchestra, museum and galleries tax reliefs
The tax reliefs for these cultural industries have been a lifeline since the Covid-19 pandemic as this sector was one of the worst hit by the lockdowns. The rates of relief were temporarily increased to 45% and 50% as a result but were due to taper down to 30% and 35% in April 2025.
The relief for Museums, Galleries and Exhibitions was also temporary, and was due to end on 31 March 2026. However the “sunset clause” has now been removed, making the relief permanent.
In addition, the rates of relief will now be permanently set at 40% and 45% – so while they are still decreasing slightly from April 2025, the impact will be of much less significance to the industry.
Independent Film Tax Credit
This new tax relief will be available to certain “independent films” which currently qualify for the Audio Visual Expenditure Credit (AVEC) at a rate of 34%, and will uplift the credit rate to 53%.
In order to qualify, the film must pass a new test: projected core expenditure must not exceed £15 million, and in addition either “key talent” (such as director and writer) must be from the UK, or the film must be an international co-production.
Films that do not qualify as independent films can continue to claim the AVEC at the basic 34%, or the uplifted rate of 39% for animated films.
If you have any questions for our Tax experts as a result of this Budget, please contact us on 01242 776000 or tax@randall-payne.co.uk.
