30 October 2024

Autumn Budget: Corporation, Business Tax and VAT

Corporation Tax

The Government will keep the rate of Corporation Tax at 25%, for the duration of the Parliament.

Capital allowances

The 100% First Year Allowances (FYA) will be extended for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure for electric vehicle charge-points, to 31 March 2026 for corporation tax purposes and 5 April 2026 for income tax purposes.

The Government continues to look for ways to clarify capital allowances rules. Full expensing to assets bought for leasing or hiring will be explored, when conditions allow, and consultations will begin on the tax treatment of predevelopment costs.

Treatment of double cab pickup vehicles

The current tax treatment of double-cab pickups is changing from 1 April 2025 for Corporation Tax and 6 April 2025 for income tax.

Historically, double-cab pickup vehicles with a payload of over 1 tonne have been treated as ‘goods vehicles’ for Capital Allowances and Benefit in Kind purposes, giving greater capital allowances and reduced Benefit in Kind charges compared to non-electric cars.

However, from April 2025, double-cabs pickups with a payload of more than 1 tonne will be treated as cars.

The existing Capital Allowances treatment will apply to purchases made before April 2025.

Transitional rules will apply for Benefit in Kind purposes for employers who have purchased, leased, or ordered a double-cab pickup before 6 April 2025. The previous treatment will continue until the earlier of; the vehicle’s disposal, the expiry of the lease, or 5 April 2029.

Although this change was previously announced in February 2024, it was overturned seven days after announcement. This time, under the new Government, it is unlikely to change.

VAT

As expected with effect from 1st January 2025, all education services and vocational training provided by a private school in the UK will be subject to VAT at the standard rate of 20%. Local authorities and devolved Governments that fund special educational needs in private schools will be compensated for the VAT they are charged on those pupils’ fees.

If you have any questions on any of the subjects raised in this update, please contact our budget team to find out more.

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