A Budget for families & workers in Scotland as Chancellor fails to pull any rabbits out of hat when it comes to business

Vishal Chopra, Head of Tax for KPMG Scotland

Vishal Chopra, Head of Tax for KPMG Scotland

Vishal Chopra, Head of Tax for KPMG Scotland, said: “We witnessed a Budget that focussed on supporting families and workers ahead of an impending election but there were few announcements of note for businesses.

“Today’s announcements amounted to an additional £300m of Barnett consequentials for Scotland, with investment in growth and redevelopment in areas such as Arbroath, Dundee and Peterhead.

“Workers and families will be pleased with some of the give-aways today, although they may fail to offset the effect of recent threshold freezes.  The big news for the general public will be the 2% cut in National Insurance (NI) from April 2024 which will be welcomed by Scottish income taxpayers.  Whilst income tax is devolved to the Scottish government NI is reserved to the UK government, meaning today’s announcements apply to Scottish income taxpayers too.

“Carrying on the theme of helping workers, changes were announced to the High Income Benefit Charge thresholds, and the VAT registration threshold is to be increased to £90,000 which will be welcomed by small business owners. It does not however solve the cliff-edge problem for growing businesses, it just moves it.  The disincentive to growth remains.

“Tax rises will be felt mostly by non-domiciled individuals, where the announcements went further than expected with a planned abolition of the current regime.  This will be replaced with an entirely new structure based on a residency based system.  To sweeten the pill there will be a transitional two year period when existing non-domiciled individuals can bring foreign income and gains to the UK and pay tax at 12% on those remittances.

“People with furnished holiday lets will be disappointed to see the regime abolished, along with stamp tax relief which can currently be claimed on multiple dwellings.

“There was relatively little of note for businesses.  The extension of full expensing to leasing has been largely anticipated although the Chancellor’s comment that this would happen when ‘finances allow’ may raise some eyebrows as to timing.  The extension of the windfall tax on energy providers to 2029 will be a disappointment for affected businesses, particularly those based in the North East of Scotland.

“There were, however, some pieces of good news scattered around with announcements of a freeze to alcohol duty which will support the hospitality sector, as well as more generous tax incentives for the creative sector.

“All eyes will now turn to the election and, if dates allow, a potential Autumn Statement later in the year.  Tax is currently failing to be a dividing line between the two main parties but there is still time.”



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KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023. 

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