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Image to represent VAT with laptop | Cheltenham Tax Accountants | Randall & Payne
Category: Budget, Expert Opinion
Topic: Tax

Spring Budget 2024: Indirect and other taxes

VAT

Registration thresholds

There have been no inflationary increases to most tax allowances for a while now, in fact there are not scheduled to be any increases until 2029 so it came as a surprise to learn that the VAT Registration Threshold is set to increase by £5,000 to £90,000 effective from 1st April 2024.  The deregistration threshold is also set to increase to £88,000 effective from the same date.

This is a notional adjustment, but will be welcomed by many small businesses with income close to the existing threshold.

DIY Housebuilders

The process for claiming back VAT under the DIY housebuilder scheme has historically been very manual, requiring a paper claim with copy invoices to be sent.  HM Revenue and Customs have digitalised the claim form, which no longer requires every invoice in support of a claim to be submitted.

However in order to protect the Exchequer they are giving HMRC Commissioners additional powers to request further evidential documentation in relation to a DIY housebuilder’s claim. This will assist the Commissioners in validating claims and carrying out compliance checks.

Duties

Vaping products duty

The government has published a consultation on the design and implementation of a Vaping Products Duty.  The initial proposal is that the duty would take effect from 1 October 2026 alongside a proportionate increase in tobacco duties.

The duty will apply to liquids for use in vaping devices and e-cigarettes at the following rates:

  • £1 per 10ml for nicotine free liquids
  • £2 per 10ml for liquid containing nicotine at concentrations between 0.1 to 10.9mg per ml
  • £3 per 10ml for liquids containing nicotine at concentrations 11mg per ml, or above

The government will also make a one-off tobacco duty increase of £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026.

Fuel Duty

Fuel duty rates have been frozen.  This has in effect happened as a result in two measuresFirstly they have extended the cut in the rates of Fuel Duty in force (5p per litre) for a further 12 months.

The historical planned increase has also been cancelled avoiding an effective 13% increase.  Interestingly the Chancellor quoted the impact that this would have had on inflation had it gone ahead, suggesting it would have resulted in a 0.2% increase.

Alcohol Duty

The government is also extending the alcohol duty freeze from 1 August 2024 until 1 February 2025, resulting in 2p less duty on an average pint of beer than if the planned increase had gone ahead.

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.