Today, Rachel Reeves, the UK Chancellor has delivered the first Labour's Budget in 14 years.

The Chancellor had widely anticipated that this would have involved making "difficult decisions” with tax rises and spending cuts in the value of £40bn.

However, the Office for Budget Responsibility has published a detailed assessment of Labour's policies for the next decade confirming a steady growth to which she replied that “This Budget will permanently increase the supply capacity of the economy, boosting long-term growth”.

The Budget includes important tax and compliance changes.

Here’s a summary of the most relevant updates:

Tax Compliance in Umbrella Companies: Starting April 2026, PAYE obligations for umbrella companies will shift to recruitment agencies, or to end-client businesses when no agency is present.

    LLP Liquidations: New rules apply to the taxation of capital gains during the liquidation of Limited Liability Partnerships from 30 October 2024, targeting tax avoidance in asset distribution.

    Overseas Pension Transfers: Restrictions on overseas transfers of UK tax-relieved pension funds will now limit double tax-free allowances for Qualifying Recognised Overseas Pension Schemes in the EEA and Gibraltar.

    Anti-Avoidance on Close Company Distributions: Effective 30 October 2024 rules will prevent shareholders from extracting untaxed funds from close companies.

    Carried Interest Taxation: Carried interest CGT rates will rise from 28% to 32% from April 2025. From April 2026 there will be further reform.

    Abolition of Non-Domicile Tax Status: as previously announced from April 2025, the remittance basis will be replaced by a residence-based tax regime. New UK residents who opt into the residence-based tax regime will benefit from the new facility for up to four years. During this period, they will not be taxed on their foreign income and gains.

    Furthermore the new regime will bring the following implications:

    • Removal of the announced 50% discount on foreign income for current residents;
    • Inclusion of worldwide assets for IHT after 10 years of residency within the past 20 years. Individuals with 10 to 13 years of residence will remain within the IHT scope for 3 years after leaving the UK, with an additional tax year added for each year of residence beyond 13 years (e.g., 5 years in scope for 15 years of residence, 7 years for 17 years);
    • Termination of offshore trusts as a means to shield assets from IHT;Rebasing of CGT assets to 5 April 2017;Extension of the Temporary Repatriation Facility from two to three years and available for individuals who have been taxed on the remittance basis. Individuals who have previously claimed the remittance basis and have untaxed FIG will be able to make an election to designate amounts derived from previously untaxed and unremitted FIG that arose prior to 6 April 2025 for a period of 3 tax years, from 6 April 2025. Designated amounts will be charged to tax at a rate of 12% in tax years 2025 to 2026 and 2026 to 2027, with the rate rising to 15% in tax year 2027 to 2028. Any remitted ‘designated amounts’ will not otherwise by charged to UK tax. The TRF will be available provided the individual is UK resident in the relevant tax years.
    • Overseas Workday Relief (OWR) will be retained and will still be based on income which relates to overseas duties determined on a just and reasonable basis. From 6 April 2025, eligibility for OWR will be primarily based on whether employees are eligible for the 4-year FIG regime. This will provide relief from income tax for a 4-year period, regardless of whether these earnings are brought to the UK or whether they are paid into an overseas account.

    Further updates will follow on this matter.

    VAT on Private Education: From 1st January 2025, the 20% VAT rate will apply to private education and boarding services.

    Stamp Duty Land Tax (SDLT): Effective 31st October 2024:

    • Higher Rate for Additional Dwellings (HRAD): Increased from 3% to 5%;
    • Corporate Purchasers: The SDLT rate on residential properties over £500,000 will rise from 15% to 17%.

    Capital Gains Tax (CGT): CGT main rates will rise to 18% and 24% as of 30 October 2024. The rates on disposal of residential property will remain at 18%and 24%. Rates for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from April 2025 and to 18% from April 2026.

    Employer National Insurance Contributions: From April 2025, the employer NIC rate will increase by 1.2% to 15%

    Inheritance Tax on Pensions: From 6 April 2027 unused pension funds and death benefits will be included in estates for IHT purposes.

    IHT Relief for Agricultural and Business Property: Effective 6 April 2026, 100% relief will be available for the first £1 million of agricultural and business property, with 50% relief on values above that threshold.

    Fixed IHT Thresholds: IHT thresholds will remain frozen until 5 April 2030.

    Business Rates Relief: From 1 April 2025, Retail, Hospitality, and Leisure businesses will receive 40% relief, capped at £110,000 per business.

      These changes may have implications for your personal and business tax planning. Please contact us for a review of your current arrangements in light of these updates.