Policy paper

Autumn Statement 2023 — Overview of tax legislation and rates (OOTLAR)

Updated 11 December 2023

Introduction

This document sets out the detail of each tax policy measure announced at Autumn Statement 2023 and of previously announced measures that will be included in Autumn Finance Bill 2023. It is intended for tax practitioners and others with an interest in tax policy changes, especially those who will be involved in consultations both on the policy and on draft legislation.

All measures listed below are applicable UK wide unless specified otherwise.

The information in the document is set out as follows:

Chapter 1 contains details of all measures that are included in Autumn Finance Bill 2023.

Chapter 2 contains details of measures which are part of Autumn Statement 2023 but are not in Autumn Finance Bill 2023.

Table 1 lists measures in this document without a corresponding announcement in the Budget report. (TBC)

Annex A provides tables of tax rates and allowances for the tax year 2023 to 2024 and the tax year 2024 to 2025.

Annex B provides a guide to the impact assessments set out in tax information and impact notes.

For an update on previously announced consultations, see the tax policy consultation tracker.

Chapter 1 — Autumn Finance Bill 2023

Personal Tax

1.1 Abolition of Pensions Lifetime Allowance

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to complete the work to remove the Lifetime Allowance. The measure will clarify the taxation of lump sums and lump sum death benefits, and the application of protections. It will also clarify the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. The measure will take effect from 6 April 2024.

The tax information and impact note for this measure provides more information: Abolition of the Lifetime Allowance from 6 April 2024

1.2 Taxation of the pension remedies for Members of Parliament, Members of Senedd and Members of the Legislative Assembly

As announced at Autumn Statement 2023, the government will introduce legislation in the Autumn Finance Bill 2023 with supporting regulations to ensure the pensions tax framework applies as intended to redress payments from the Parliamentary Contributory Pension Fund, the Senedd Pension Scheme and the Assembly Members’ Pension. The changes will take effect from the date of Royal Assent to the Autumn Finance Bill 2023.

The tax information and impact note for this measure provides more information Taxation of Members of Parliament, Members of the Senedd and Members of the Legislative Assembly of Northern Ireland pension reform remedies

1.3 Off-payroll working (IR35): calculation of Pay As You Earn (PAYE) liability in cases of non-compliance

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to enable HMRC to reduce the PAYE liability of a deemed employer, where that engagement was incorrectly treated as self-employed for tax purposes. This would account for tax and National Insurance contributions already paid by a worker and their intermediary on payments received from an off-payroll working engagement. Secondary legislation will be laid in due course to set out how it will work. The changes will take effect from 6 April 2024.

A response to the consultation launched in April 2023 has also been published alongside the Statement.

The tax information and impact note for this measure provides more information: Calculation of PAYE liability in cases of non-compliance with off-payroll working

1.4 Enterprise Management Incentives (EMI): extending the time limit to submit a notification of a grant of options

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to extend the time limit to notify HMRC of a grant of EMI options from 92 days following the grant to 6 July following the end of the tax year in which the grant was made. The change will apply to EMI options granted on or after 6 April 2024.

The tax information and impact note for this measure provides more information: Enterprise Management Incentives: Extending the time limit to submit a notification of a grant of options

1.5 Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) extension

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to extend the existing sunset clauses for the EIS and VCT scheme from 6 April 2025 to 6 April 2035. This will continue the availability of Income and Capital Gains Tax reliefs for investors in new shares issued before this date by EIS qualifying companies and VCTs. The changes will take effect in accordance with regulations made by HM Treasury.

The tax information and impact note for this measure provides more information: Extension of the Enterprise Investment Scheme and Venture Capital Trust Scheme

1.6 Expanding the cash basis

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to expand the income tax cash basis for the self-employed and partnerships. The cash basis is a simplified way of calculating taxable profits for income tax purposes. The changes that will be made are to set the cash basis as the default method for small businesses, and remove the turnover, interest, and loss relief restrictions that currently apply to the cash basis. The changes will take effect from 6 April 2024. Read the ‘Expanding the Cash Basis Summary of Responses’ document for more information.

The tax information and impact note for this measure provides more information: Expanding the Income Tax cash basis for self-employed individuals and partnerships

Corporate Tax

1.7 Capital allowances: permanent full expensing

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to make temporary full expensing permanent.

Introduced at Spring Budget 2023, temporary full expensing allows companies incurring qualifying expenditure on the provision of new plant and machinery on or after 1 April 2023 but before 1 April 2026 to claim:

• a 100% first-year allowance for main rate expenditure — known as full expensing
• a 50% first-year allowance for special rate expenditure

The expiry date of 1 April 2026 will be removed in Autumn Finance Bill 2023 to give effect to permanent full expensing. The government will also launch a technical consultation on wider changes to further simplify the UK’s capital allowances legislation.

Expenditure on plant and machinery for leasing remains excluded from full expensing. The government will publish a technical consultation on draft legislation in due course to help it consider any potential extension to include plant and machinery for leasing, which is subject to future decision.

The tax information and impact note for this measure provides more information: Capital allowances — permanent full expensing

1.8 Research and Development (R&D) tax reliefs: merger of current small or medium enterprise (SME) and R&D Expenditure Credit (RDEC) scheme

As announced at Autumn Statement 2023,the government will introduce legislation in Autumn Finance Bill 2023 to merge the current RDEC and R&D SME schemes for accounting periods beginning on or after 1 April 2024. This will simplify and improve the system.

The rate offered under the merged scheme will be implemented at the current RDEC rate of 20%.

The notional tax rate applied to loss-makers in the merged scheme will be the small profit rate of 19%, rather than the 25% main rate currently set in the RDEC.

The tax information and impact note for this measure provides more information: Research & Development (R&D) tax relief reforms

1.9 Research and Development (R&D) tax reliefs: enhanced support for R&D intensive small or medium enterprises (SMEs)

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to implement the enhanced support for R&D intensive SMEs, providing a higher rate of payable tax credit for eligible SMEs. Loss-making companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if they meet the definition for R&D intensity.

The intensity threshold required to qualify for this enhanced support will be reduced from 40% to 30% from 1 April 2024. A one-year grace period will also be introduced, enabling a company which has claimed successfully but which fails to meet the intensity threshold, for example due to a one-off shock, to continue to claim for the following period provided it meets the other conditions for the relief.

The tax information and impact note for this measure provides more information: Research & Development (R&D) tax relief reforms

1.10 Research and Development (R&D) tax reliefs: restricting nominations and assignments

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to remove the use of nominations for R&D tax credit payments (subject to limited exceptions). This will stop payments being made to third parties, with payments now going directly to claimants. The government will also legislate to prevent any new assignment (whether equitable or statutory) of R&D tax credits. HMRC will withhold payment until it is able to make payment directly to the claimant company. The change on nominations will take effect for all claims to payable R&D tax credits made on or after 1 April 2024. The restriction on new assignments will apply in relation to assignments made on or after 22 November 2023.

The tax information and impact note for this measure provides more information: Research & Development (R&D) tax relief reforms

1.11 Reform of audio-visual creative tax reliefs

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to reform the film, TV and video games tax reliefs to refundable expenditure credits — an Audio-Visual Expenditure Credit (AVEC) for film and TV programmes, and a Video Games Expenditure Credit (VGEC) for video games. Under the Audio-Visual Expenditure Credit, animated film and TV and children’s TV programmes will be eligible or a rate of 39%. The credits will be available from 1 January 2024.

The definition of a ‘documentary’ for the purpose of AVEC will be amended to align with guidance used by the British Film Institute.

The tax information and impact note for this measure provides more information: Reform of film, TV and video games tax reliefs to expenditure credits

1.12 Administrative changes to the creative industry tax reliefs

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 for minor administrative changes to the creative industry tax reliefs. This includes rules for connected party transactions and for additional information to be shared with HMRC by companies when they claim relief. The government will also legislate technical clarifications to the cultural tax reliefs for theatre, orchestras and museums and galleries.

The tax information and impact note for this measure provides more information: Creative industry tax reliefs: administrative changes

1.13 Pillar 2: multinational top-up tax and domestic top-up tax amendments

Further to the publication of draft legislation on 18 July and 27 September 2023, the government will introduce legislation in Autumn Finance Bill 2023 to amend the Multinational Top-up Tax and Domestic Top-up Tax which were introduced in Spring Finance Bill 2023.

These taxes are the UK’s adoption of Pillar 2, an international agreement to help tackle profit shifting and aggressive tax planning by multinationals. The amendments reflect recent internationally agreed guidance and clarify areas identified from stakeholder consultation. They will take effect for accounting periods beginning on or after 31 December 2023.

Draft legislation for some of the amendments was published for consultation on 18 July and 27 September 2023. Minor changes have been made reflecting responses received

The tax information and impact note for this measure provides more information: Multinational top-up tax and domestic top-up tax amendments

1.14 Real Estate Investment Trusts (REITs)

Further to the publication of draft legislation on 18 July 2023, the government will introduce legislation in Autumn Finance Bill 2023 to make amendments to the rules for Real Estate Investment Trusts (REITs) to enhance the competitiveness of the regime. The changes will generally take effect from the date of Royal Assent to Autumn Finance Bill 2023, with the exception of two of the amendments which will be treated as always having had effect and an amendment which will apply for accounting periods ending on or after 1 April 2023.

The tax information and impact note for this measure provides more information: Amendments to the Real Estate Investment Trust regime

1.15 Stamp Duty and Stamp Duty Reserve Tax: widening access to the Growth Market Exemption

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to extend the Growth Market Exemption, a relief from Stamp Duty and Stamp Duty Reserve Tax, to include smaller, innovative growth markets. The change will allow Financial Conduct Authority regulated multilateral trading facilities (MTFs), that are operated by investment firms, to access the exemption. MTFs will apply through the usual HMRC application and approval process. It will also legislate to increase the company market capitalisation cap condition within the growth market exemption from £170m to £450m.

These changes will take effect from 1 January 2024.

The tax information and impact note for this measure provides more information: Growth Market Exemption for Stamp Duty and Stamp Duty Reserve Tax

1.16 Stamp Duty and Stamp Duty Reserve Tax: removal of the 1.5% charge on issues and certain related transfers

As announced on 14 September 2023, the government will introduce legislation in Autumn Finance Bill 2023 to ensure that the existing 0% charges under Stamp Duty and Stamp Duty Reserve Tax on issues (and certain related transfers) of securities onto foreign markets, will remain in place and be brought permanently into UK law following the changes in the Retained EU Law (Revocation and Reform) Act 2023 taking effect. The legislation will also preserve the 0% charge on issues of bearer instruments. Draft legislation was published for technical consultation on 14 September. The changes will take effect from 1 January 2024.

The tax information and impact note for this measure provides more information: Stamp Taxes on Shares: Removal of 1.5% charge on issues and certain related transfers

1.17 Tonnage Tax: extension to ship management and capital allowance leasing limits

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to permit third party ship management companies to join the Tonnage Tax regime. At present, only ship operators, defined as vessel owners or charterers, may elect into the regime. The government will also bring forward legislation to raise the limit on capital allowances to £200 million for lessors of ships into the regime in line with inflation and the cost of ships. These measures will take effect from 1 April 2024.

The tax information and impact notes for this measure provides more information: Tonnage tax elections to include third party ship managers and Increasing the capital allowance limits for leasing into tonnage tax

1.18 Post Office compensation schemes, Corporate Entities

The government will introduce legislation in Autumn Finance Bill 2023 to ensure that compensation recipients of the Post Office schemes (Horizon Shortfall Scheme, Group Litigation Order, Suspension Remuneration Review and Post Office Process Review Scheme), who are structured as a corporate entity, will be taxed in a similar way to individual recipients.

Furthermore, any top up payment received to account for a tax liability will not be subject to tax at either the corporate or individual level. The changes will be retrospective to the date at which the compensation payments were received.

The tax information and impact note for this measure provides more information: Tax exemption for corporate recipients of compensation payments made under the Post Office compensation schemes: Group Litigation Order, Horizon Shortfall Scheme, Suspension Remuneration Review or Post Office Process Review Scheme

Indirect Tax

1.19 Tobacco duty rates

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to:

• increase the duty rates for all tobacco products by the tobacco duty escalator of 2% above inflation (based on the Retail Price Index (RPI))
• increase the rate for hand-rolling tobacco by an additional 10% above the escalator, to 12% above RPI inflation

The changes will take effect from 6pm on 22 November 2023. The rates are set out in Annex A.

The tax information and impact note for this measure provides more information: Changes to tobacco duty rates from 22 November 2023

1.20 Aggregates Levy Rate for 2024 to 2025

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to increase the rate of Aggregates Levy in line with Retail Price Index (RPI).

The change will take effect from 1 April 2024 as set out in Annex A.

The tax information and impact note for this measure provides more information: Changes to the Aggregates Levy rate from 1 April 2024

1.21 Landfill Tax: rates for 2024 to 2025

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to increase the standard and lower rates of Landfill Tax in line with Retail Price Index (RPI), rounded up to the nearest 5 pence. The changes will take effect on and after 1 April 2024, as set out in Annex A.

Landfill Tax was devolved to the Scottish Parliament in April 2015 and to the Welsh Assembly in April 2018.

The tax information and impact note for this measure provides more information: Landfill Tax rates for 2024 to 2025

1.22 Plastic Packaging Tax rate

As announced at Autumn Statement 2023, the government will introduce legislation in the Autumn Finance Bill 2023 to increase the rate of Plastic Packaging Tax in line with the Consumer Price Index (CPI). The change will take effect from 1 April 2024. The rate is set out in Annex A.

The tax information and impact note for this measure provides more information: Changes to Plastic Packaging Tax rates from 1 April 2024

1.23 Air Passenger Duty rates for 2024 to 2025

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to increase Air Passenger Duty (APD) rates (rounded to the nearest pound) for 2024 to 2025 in line with the Retail Price Index (RPI) as forecast at Spring Budget 2023. These changes will take effect from 1 April 2024. The APD rates are set out in Annex A.

The tax information and impact note for this measure provides more information: Changes to Air Passenger Duty rates from 1 April 2024

1.24 Rebate on heavy oil and certain bioblends used for heating

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to make a minor technical amendment to restrictions on the use of certain rebated heavy oils and bioblends. With the exception of those that use kerosene, this measure permits machines and appliances to use rebated heavy oil (other than gas oil) or bioblends that do not contain gas oil, for commercial heating. This measure will take effect from the date of Royal Assent to Autumn Finance Bill 2023.

The tax information and impact note for this measure provides more information: Fuel Duty for heavy oil and bioblends for heating

1.25 Vehicle Excise Duty (VED) and Heavy Goods Vehicle (HGV) levy uprating

As announced at Autumn Statement 2023, the government will introduce legislation in Autumn Finance Bill 2023 to increase VED rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) from 1 April 2024. To continue to support the haulage sector, the rates for VED for Heavy Goods Vehicles (HGVs) will be maintained at 2023 to 2024 levels, with effect from 1 April 2024.

As announced at Spring Budget 2023, the government introduced a new reformed HGV levy from August 2023. To further support the haulage sector, with effect from 1 April 2024 HGV levy rates will be frozen at 2023 to 2024 levels for 2024 to 2025.

VED rates are set out in Annex A.

The tax information and impact note for this measure provides more information: Vehicle Excise Duty rates for cars, vans and motorcycles from 1 April 2024

1.26 Vehicle Excise Duty exemption for Ukrainian vehicles

As announced on 18 July 2023, the government will introduce legislation in Autumn Finance Bill 2023 to exempt Ukrainian nationals in the UK under the Family, Sponsor and Extension Ukrainian visa schemes from the requirement to register and tax their Ukrainian-plated and registered vehicles in the UK for a period of 36 months.

The tax information and impact note for this measure provides more information: Exemption for Vehicle Excise Duty for Ukrainian vehicles

1.27 Interpretation of VAT and excise law

The government will introduce legislation in Autumn Finance Bill 2023 to clarify how VAT and excise law should be interpreted in the light of changes made by the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act). This was announced and draft legislation published for technical consultation on 20 October 2023.

The measure confirms that, in relation to VAT and excise law, in line with the REUL Act, it will no longer be possible for any part of any UK Act of Parliament or domestic subordinate legislation to be quashed or disapplied on the basis that it was incompatible with EU law. It also ensures that UK VAT and excise legislation continues to be interpreted as Parliament intended, drawing on rights and principles that currently apply in interpreting UK law.

The tax information and impact note for this measure provides more information: Interpretation of VAT and excise legislation

Tax administration and other measures

1.28 Tougher consequences for promoters of tax avoidance

As announced at Autumn Statement 2023, the government will introduce legislation in the Autumn Finance Bill 2023 to introduce:

• a criminal offence for promoters of tax avoidance who continue to promote avoidance schemes after receiving a Stop Notice requiring them to stop promoting schemes described in that notice
• a new power enabling HMRC to bring disqualification action against directors of companies involved in promoting tax avoidance, including those who control or exercise influence over a company

These changes will take effect from Royal Assent to Autumn Finance Bill 2023.

The tax information and impact note for these measures provides more information: Dealing with promoters of tax avoidance

1.29 Doubling maximum sentences for tax fraud

As announced at Spring Budget 2023, the government will introduce legislation in Autumn Finance Bill 2023 to double the maximum sentences for the most egregious forms of tax fraud from 7 to 14 years. These changes will take effect from the date of Royal Assent to Autumn Finance Bill 2023.

The tax information and impact note for this measure provides more information: Increasing the maximum prison term for tax fraud

1.30 Construction Industry Scheme (CIS) reform: reforms to the Gross Payment Status test

As announced at Autumn Statement 2023, the government will introduce legislation in the Autumn Finance Bill 2023 to add compliance with VAT obligations to the Construction Industry Scheme Gross Payment Status compliance test. The changes will also expand HMRC’s powers to remove Gross Payment Status immediately in cases of serious non-compliance involving VAT, Income Tax Self-Assessment, Corporation Tax Self-Assessment and PAYE. Regulations will be laid to set out exceptions to VAT compliance obligations and to remove the majority of payments made by landlords to tenants from the scope of the Scheme. All legislation will come into force from 6 April 2024.

The summary of responses to the consultation was also published at Autumn Statement 2023.

The tax information and impact note for this measure provides more information: Construction Industry Scheme reform from 6 April 2024

1.31 Improving the data HMRC collects from its customers

As announced on 27 April 2023, the government will introduce legislation in Autumn Finance Bill 2023 to require employers, company directors, and the self-employed to provide new or improved data to HMRC to enable better outcomes for citizens and businesses. Through PAYE reporting, employers will be required to provide data on employee hours paid, and through Self Assessment returns taxpayers will be required to provide dividend income and the percentage share from shareholders in owner-managed businesses separately to other dividend income, and, for trading businesses, the start and end dates of self-employment. Following further technical consultation, regulations will be laid spring 2024, with changes taking effect from the tax year 2025 to 2026.

The tax information and impact note for this measure provides more information: Change to data HMRC collects from customers

1.32 Making Tax Digital: volunteers and penalties

As announced at Autumn Statement 23, the government will introduce legislation in Autumn Finance Bill 2023 to ensure that taxpayers who volunteer to join Making Tax Digital (MTD) from April 2024 are subject to the government’s new, fairer penalty regime for late filing of tax returns and late payment of tax. These changes, which will apply new penalties to annual obligations only, will take effect from 6 April 2024.

The tax information and impact note for this measure provides more information: Penalty Reform for Making Tax Digital for Income Tax Self Assessment volunteers

Chapter 2 — Measures announced at Autumn Statement 2023 but not in the Autumn Finance Bill 2023

This chapter contains details of other tax measures announced at Autumn Statement 2023 but are not in Autumn Finance Bill 2023. This includes consultations and measures that will be legislated by secondary legislation and future Finance Bills.

Personal Tax

2.1 National Insurance contributions (NICs) rates

As announced at Autumn Statement 2023, the government will introduce legislation to reduce the main rate of primary Class 1 National Insurance contributions by 2 percentage points from 12% to 10% from 6 January 2024. For the self-employed the main rate of Class 4 National Insurance contributions will be reduced by 1 percentage point from 9% to 8% from 6 April 2024.

From 6 April 2024, self-employed people with profits above £12,570 will no longer be required to pay Class 2, but will continue to receive access to contributory benefits including the state pension. Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits including the state pension through a National Insurance credit without paying National Insurance contributions as they do currently. Those with profits under £6,725 who choose to pay Class 2 voluntarily to get access to contributory benefits including the state pension will continue to be able to do so.

Technical specifications for payroll software companies will be published in due course.

2.2 National Insurance contributions (NICs) rates and thresholds

As announced at Autumn Statement 2023, the government will freeze the Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) at 2023 to 2024 levels in 2024 to 2025.

For those paying voluntarily, the government will also freeze Class 2 and Class 3 National Insurance contribution rates at their 2023 to 2024 levels in 2024 to 2025. The main Class 2 rate will remain at £3.45 per week, and the Class 3 rate will remain at £17.45 per week. This will not affect existing arrangements for payments of voluntary Class 2 or Class 3 National Insurance contributions connected with previous tax years.

In line with previous announcements at Autumn Statement 2022, most National Insurance limits and thresholds will be maintained at 2023 to 2024 levels, until the 2027 to 2028 tax year. Details can be found within Annex A.

2.3 Extension of National Insurance contributions (NICs) relief for hiring veterans

As announced at Autumn Statement 2023, the government is extending the employer National Insurance contributions relief for employers hiring qualifying veterans for a further year from April 2024 until April 2025. This means that businesses will continue to pay no employer National Insurance contributions up to annual earnings of £50,270 for the first year of a qualifying veteran’s employment in a civilian role. The government will extend the relief through secondary affirmative legislation ahead of April 2024.

2.4 Van benefit charge and the car and van fuel benefit charges for 2024 to 2025

As announced at Autumn Statement 2023, the government announced that the van benefit charge and the car and van fuel benefit charges will be maintained at 2023 to 2024 levels for 2024 to 2025.

The flat-rate van benefit charge will remain at £3,960. The multiplier for the car fuel benefit will remain at £27,800. The flat-rate van fuel benefit charge will remain at £757.

2.5 Individual Savings Account (ISA) annual subscription limit

As announced at Autumn Statement 2023, the adult ISA annual subscription limit for 2024 to 2025 will remain unchanged at £20,000.

2.6 Child Trust Funds annual subscription limit

As announced at Autumn Statement 2023, the annual subscription limit for Child Trust Funds for 2024 to 2025 will remain unchanged at £9,000.

2.7 Junior ISA annual subscription limit

As announced at Autumn Statement 2023, the annual subscription limit for Junior ISAs for 2024 to 2025 will remain unchanged at £9,000.

2.8 Lifetime ISA annual subscription limit

As announced at Autumn Statement 2023, the annual subscription limit for Lifetime ISAs for 2024 to 2025 will remain unchanged at £4,000.

2.9 Help to Save reform

As announced at Autumn Statement 2023, the government is reforming the Help to Save scheme. The new design will be published in due course, alongside the launch of a consultation on the most effective way to deliver it.

2.10 ISA: digitise the ISA reporting system

As announced at Autumn Statement 2023, the government will make changes to ISAs to simplify the scheme and widen the scope of investments that can be included in ISAs.

To simplify the scheme the government will:

• allow multiple subscriptions in each year to ISAs of the same type, from 6 April 2024
• remove the requirement to make a fresh ISA application where an existing ISA account has received no subscription in the previous tax year, from 6 April 2024
• allow partial transfers of current year ISA subscriptions between providers, from 6 April 2024
• harmonise the account opening age for any adult ISAs to 18, from 6 April 2024
• digitise the ISA reporting system to enable the development of digital tools to support investors

To widen the scope of investments the government will:

• allow Long-Term Asset Funds to be permitted investments in the Innovative Finance ISA, from 6 April 2024
• allow open-ended property funds with extended notice periods to be permitted investments in the Innovative Finance ISA, from 6 April 2024
• engage with the finance industry on allowing certain fractional shares contracts to become permitted ISA investments

For those measures that take effect from 6 April 2024 a statutory instrument will follow early next year.

Over the next few months, HMRC will establish stakeholder forums and communication channels for ISA managers and relevant trade bodies to ensure the pace and sequencing of the move to a digital system reflects the needs of ISA providers and investors, as well as the requirement to upgrade HMRC’s own infrastructure.

2.11 Pension Schemes Relief at Source (RAS)

A draft enabling clause to support the digitalisation of Relief at Source (RAS) pensions tax administration was published in July 2023. Recent discussions with industry have confirmed that a solution for digitising RAS, that could be delivered for April 2025, would not meet the needs of the largest schemes. Furthermore, the deferral of digitisation of RAS will assist industry’s concerns on their capacity to deliver an ambitious programme of government reform. Therefore, the digitisation of RAS will not be operative until April 2027 at the earliest, and there will be no enabling clause in the Autumn Finance Bill 2023.

2.12 Surplus extraction arrangements for defined benefit pension scheme

As announced at Autumn Statement 2023, the government will introduce secondary legislation to reduce the free-standing tax charge which applies to authorised surplus payments to sponsoring employers of a registered pension scheme from 35% to 25%. This measure will take effect from 6 April 2024.

2.13 Announcement of future guidance changes to tax relief for self-employed

As announced at Autumn Statement 2023, HMRC will clarify guidance to businesses on what training costs can be deductible for tax purposes. This will ensure that businesses can be confident that updating existing skills or maintaining pace with technological advances or changes in industry practices, are allowable costs when calculating the taxable profits of a business.

2.14 Compensation Schemes — Post Office Limited

The government will introduce legislation to exempt top-up payments made under the Suspension Remuneration Review (SRR) scheme and payments yet to be made under both SRR and the Post Office Process Review Scheme from Income Tax, National Insurance contributions and Capital Gains Tax. The exemptions will be provided through further statutory instruments. Exemptions for corporate recipients are being legislated for separately.

This builds from 6 July 2023, where the government introduced two statutory instruments to exempt top-up payments made under the Horizon Shortfall Scheme, created in response to the Horizon failures, from Income Tax, National Insurance contributions and Capital Gains Tax.

Corporate Tax

2.15 Pillar 2: Undertaxed Profits Rule (UTPR)

As announced at Autumn Statement 2023, the government will introduce legislation in a future Finance Bill to amend the multinational top-up tax to introduce the Undertaxed Profits Rule (UTPR). This is the backstop rule in Pillar 2, an international agreement to help tackle profit shifting and aggressive tax planning by multinationals.

Draft legislation was published for consultation on 18 July 2023.

The UTPR will take effect for accounting periods beginning on or after 31 December 2024.

2.16 Repeal of Offshore Receipts in respect of Intangible Property (ORIP)

As announced in Autumn Statement 2023, the government will introduce legislation to repeal the Offshore Receipts in respect of Intangible Property (ORIP) rules in 2024.

The repeal will take effect for income arising from 31 December 2024 alongside the introduction of the Pillar 2 Undertaxed Profits Rule, which will more comprehensively discourage the multinational tax-planning arrangements that ORIP sought to counter.

2.17 Electricity Generator Levy: new investment exemption

As announced at Autumn Statement 2023, the government will introduce legislation in an upcoming Finance Bill to provide for an exemption from the Electricity Generator Levy for receipts from new electricity generating stations. New electricity generating stations will include new standalone stations and substantial expansions and repowering of existing stations. This measure will take effect for revenues from new electricity generating stations where the substantive decision to invest is taken on or after 22 November 2023.

2.18 Energy Profits Levy (EPL): Energy Security Investment Mechanism (ESIM)

As announced at Autumn Statement 2023, the government has published a Summary of Responses and Technical Note on the ESIM following the discussion note published in July 2023. The technical note provides detail on how the ESIM will apply, and how the EPL will cease if triggered by oil and gas prices returning to historically normal levels for a sustained period. The government will introduce legislation to give effect to the ESIM in due course.

2.19 Oil and gas taxation: treatment of payments into decommissioning funds for Carbon Capture Usage and Storage (CCUS) purposes

As announced at Autumn Statement 2023, the government will introduce legislation in a future Finance Bill to provide tax relief for payments by oil and gas companies into decommissioning funds where this relates to the repurposing of assets within the oil and gas corporation tax ring fence for use in CCUS activities. Additionally, the government will introduce legislation to remove corresponding asset value payments for those assets from the charge to the Energy Profits Levy.

2.20 Freeport tax reliefs sunset date extension

As announced at Autumn Statement 2023, the government will extend the sunset date for the Freeport tax reliefs to 30 September 2031 for Freeports in England. In each Freeport, the extension will be conditional on agreement of delivery plans and will be legislated once those delivery plans are agreed. For Freeports in Scotland and Wales the reliefs will be extended from five to ten years, subject to agreement with the devolved administrations.

The current sunset date for the Stamp Duty Land Tax (SDLT) relief, enhanced structures and buildings allowances and enhanced capital allowances for plant and machinery is 30 September 2026. The secondary Class 1 National Insurance contributions relief is currently available on the earnings of eligible new employees starting by 5 April 2026 only. The National Insurance contributions relief will continue to apply for 36 months per employee within the extended ten-year window.

2.21 Investment Zones tax reliefs sunset date extension

As announced at Autumn Statement 2023, the government will extend the Investment Zones tax reliefs from five to ten years. This extension is subject to the ongoing co-design of proposals and agreement of delivery plans with the Department for Levelling Up, Housing and Communities (DLUHC) and HM Treasury and will be legislated in 2024. The UK government will work in partnership with the Scottish and Welsh governments with the intention of delivering an extension to the Investment Zones programme in Scotland and Wales.

The current sunset date for the Stamp Duty Land Tax (SDLT) relief, enhanced structures and buildings allowances and enhanced capital allowances for plant and machinery is 30 September 2026. The secondary Class 1 National Insurance contributions relief is currently available on the earnings of eligible new employees starting by 5 April 2026 only. The National Insurance contributions relief will continue to apply for 36 months per employee within the extended ten-year window.

2.22 Call for evidence on further support for visual effects

As announced at Autumn Statement 2023, the government has published a call for evidence on recent trends in the visual effects industry. The call for evidence will run until the 3 January 2024.

The government will follow the call for evidence with a consultation on the design of additional tax relief for visual effects expenditure, which the government intends to implement from April 2025.

Indirect Tax

2.23 Alcohol duty rates

As announced at Autumn Statement 2023, the government is freezing the rates of alcohol duty until 1 August 2024 and delaying its annual uprating decision announcement on uprating to Spring Budget 2024 to give businesses time to adapt to the duty system introduced on 1 August 2023.

2.24 The tax treatment of remote gambling

As announced at Autumn Statement 2023, the government will shortly publish a consultation on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through a three tax structure as at present.

2.25 Gaming duty

As announced at Autumn Statement 2023, the Gross Gaming Yield bandings used to determine the rate of gaming duty will be frozen from 1 April 2024.

2.26 Aggregates Levy rate for 2025 to 2026

As announced at Autumn Statement 2023, the government will introduce legislation in a future Finance Bill to increase the rate of Aggregates Levy in line with the Retail Price Index (RPI). The change will take effect from 1 April 2025. The rate is set out in Annex A.

2.27 Carbon Price support rates

As announced at Autumn Statement 2023, the government will continue the freeze of Carbon Price Support (CPS) rates of Climate Change Levy (CCL) and Fuel Duty to maintain a cost of £18 per tonne of carbon dioxide in Great Britain in 2025 to 2026. No legislation is required to implement the freeze. The CPS rates of CCL and Fuel Duty are set out in Annex A.

2.28 Climate Change Levy rate

As announced at Autumn Statement 2023, the government will freeze the main and reduced rates of Climate Change Levy (CCL) from 1 April 2025. No legislation is required to implement the freeze. The main and reduced rates of CCL from 1 April 2025 are set out in Annex A.

2.29 Future of the Climate Change Agreement scheme

As announced at Autumn Statement 2023, a new six-year Climate Change Agreement (CCA) scheme will be introduced. The Department for Energy Security and Net Zero (DESNZ) have published a consultation on the detail of the new scheme. Legislation will be prepared during 2024. The new CCA scheme will give access to reduced rates of Climate Change Levy from 1 July 2027 to 31 March 2033 for energy intensive firms that meet energy efficiency or emissions reduction targets agreed with the Environment Agency.

2.30 Emissions Trading Scheme (ETS) net zero cap

As set out by the UK ETS Authority in July 2023, will reduce the number of ETS permits available for purchase from government by 45% between 2023 and 2027. It will also extend the scheme to cover emissions from domestic maritime and energy from waste in 2026 and 2028 respectively. This change has been enacted by amending the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 through an enabling power under the Finance Act 2020.

2.31 Women’s sanitary products

As announced at Autumn Statement 2023, the government will introduce legislation to extend the scope of the current VAT zero rate relief on women’s sanitary products to include reusable period underwear. Currently, reusable period underwear is standard rated for VAT. The changes will take effect from 1 January 2024.

2.32 Reforms to the VAT energy-saving materials relief

As announced at Autumn Statement 2023, the government will introduce legislation to expand the VAT relief available on the installation of energy-saving materials by extending the relief to additional technologies, such as water-source heat pumps, and bringing buildings used solely for a relevant charitable purpose within scope. These reforms will be implemented from February 2024. Full details on these reforms will be published in a summary of responses document shortly.

2.33 VAT Treatment of private hire vehicle operator

As announced at Autumn Statement 2023, the government will consult in early 2024 on the implications of the High Court’s ruling in Uber Britannia Ltd vs Sefton MBC.

Tax administration and other measures

2.34 Simplifying Making Tax Digital (MTD) for Income Tax Self Assessment

As announced at Autumn Statement 2023, the government will make design changes to Making Tax Digital for Income Tax Self Assessment, simplifying and improving the system for taxpayers and their representatives. The government will:

• simplify the requirements for all taxpayers providing quarterly updates and for taxpayers with more complex affairs, such as landlords with jointly-owned property
• remove the requirement to provide an End of Period Statement
• exempt some taxpayers, including those without a National Insurance number, from MTD
• enable taxpayers using MTD to be represented by more than one tax agent

Draft regulations will be published for technical consultation later in 2023.

2.35 Annual Tax on Enveloped Dwellings (ATED)

As announced at Autumn Statement 2023, the ATED annual charges will rise by 6.7% from 1 April 2024 in line with the September 2023 Consumer Price Index. The 2024 to 2025 charges are set out in Annex A.

Table 1: Measures in this document without a corresponding announcement in the Budget report

Measure title	Paragraph number
Enterprise Management Incentives (EMI): Extending the time limit to submit a notification of grant of options	1.4
Research and Development (R&D) tax reliefs: restricting nominations and assignments	1.10
Reform of audio-visual creative tax reliefs	1.11
Stamp Duty and Stamp Duty Reserve Tax: removal of the 1.5% charge on issues and certain related transfers	1.16
Tonnage Tax: extension to ship management and capital allowance leasing limits	1.17
Landfill Tax: rates for 2024 to 2025	1.21
Air Passenger Duty (APD) rates for 2024 to 2025	1.23
Rebate on heavy oil and certain bioblends used for heating	1.24
Vehicle Excise Duty exemption for Ukrainian vehicles	1.26
Interpretation of VAT and excise law	1.27
Double maximum sentences for tax fraud	1.29
Pension Schemes Relief at Source (RAS)	2.11
Compensation Schemes — Post Office Limited	2.14
Emissions Trading Scheme (ETS) net zero cap	2.30