Tax reforms you need to be aware of in 2024

Tax landscapes are changing fast across the UK and Europe. With economic pressures, regulatory updates, and shifting political priorities, both individuals and businesses must keep up with reforms to avoid surprises and to plan efficiently. Here are some of the most important tax changes in 2024 (and upcoming in 2025) that you need to know.

United Kingdom

1. Changes in Capital Gains Tax (CGT)

• The UK government has increased CGT rates: the lower (basic) rate is rising from 10% to 18%, and the higher rate from 20% to 24%.
• These changes apply from 30 October 2024 for most asset disposals.

2. Non-Domicile (Non‑Dom) Regime Overhaul

• From April 2025, the UK will abolish the old “non-dom” tax treatment (including the remittance basis) and instead introduce a residence-based regime for foreign income and gains.
• For those who qualify (e.g. returning UK residents after long non-residence), there will be a relief period: foreign income & gains (FIG) arising in the first four tax years may be exempt from UK tax under certain conditions.

3. National Insurance & Employer Contributions

• Employer’s National Insurance Contributions (NICs) will increase from 13.8% to 15% starting April 2025.
• The threshold at which employers begin to pay NICs (i.e., the earnings level) will be reduced (from about £9,100 to £5,000 per employee) — meaning more of an employer cost burden for lower-paid employees.

4. High Income Child Benefit Charge (HICBC)

• The threshold for the High Income Child Benefit Charge is being increased from £50,000 to £60,000 from April 2024.
• Also, the way the charge scales up is being made less steep: the “phase‑out” rate (how fast you lose benefit) is being reduced.

5. Property & Stamp Duty Land Tax (SDLT) Surcharge

• There is a higher stamp duty surcharge on additional residential properties (second homes etc.) starting 31 October 2024.
• Other property‑related CGT and reliefs have also been affected (e.g. the rate for residential property gains remains 18% / 24% in many cases).

6. Inheritance Tax, Agricultural & Woodland Reliefs

• From 6 April 2024, Agricultural Property Relief (APR) and Woodland Relief will be geographically restricted: only UK property will qualify (properties in the EEA, Channel Islands or Isle of Man will no longer count as qualifying under the UK‑based reliefs).

7. VAT, Excise and Other Indirect Taxes

• The threshold for VAT registration has been raised from £85,000 to £90,000 from April 2024.
• Fuel duty is frozen for another year, alcohol duty is frozen until February 2025.

Europe / European Union

While each EU Member State may have specific reforms, there are some EU‑wide initiatives and directives that are important to watch in 2024‑2025.

1. VAT in the Digital Age / VAT Reforms

• The EU is expanding proposals under “VAT in the Digital Age”. These reforms aim to simplify and modernize VAT rules especially for cross‑border digital transactions. This may include fewer VAT registrations in multiple member states, stronger use of e‑invoicing and digital reporting.
• There is a proposal (or approved legislation) to improve withholding tax procedures, especially for cross‑border dividends/interest, making reliefs quicker and reducing double taxation risk.

2. Fight Against Tax Fraud and Evasion

• The EU is strengthening its systems to detect VAT fraud, especially in e‑commerce, via improvements in data collection and cross‑border payment transparency for payment service providers.
• Member States are working to implement tax transparency, better oversight of withholding taxes, and faster relief of excess withholding taxes.

3. OECD / EU Minimum Corporate Tax

• There is increasing alignment with global efforts (e.g. OECD’s Pillar Two) to establish a global minimum tax for large multinational corporations. Many European states are implementing or planning to implement these rules. This could change how multinational profits are taxed across multiple jurisdictions.
• 4. Domestic EU State Measures

• Individual EU countries are updating their tax codes, adjusting VAT rates, modifying tax incentives, or revising thresholds. The OECD / EU Tax Reforms tables track many of these changes.
• Businesses operating cross‑border in the EU should monitor changes in withholding, VAT compliance, and digital reporting requirements.

What Should You Do to Stay Prepared

Here are some actionable tips based on these reforms:

1. Review your tax residence / domicile status, especially if you or your business have foreign income, assets abroad, or might be relocating.
2. Plan asset disposals (shares, properties) taking into account higher CGT rates and changes in reliefs.
3. Check employment costs if you employ staff: increased employer NICs and lowered thresholds mean higher costs.
4. Look at cash flow & planning for children benefit / other benefits given changes in thresholds (e.g. HICBC).
5. For international businesses, ensure compliance with evolving VAT / withholding tax & cross‑border obligations (especially digital, e‑commerce, and payments).
6. Consult tax advisors for personalized advice — many reforms have transitional regimes, timing details, elections or options.

Conclusion

The UK is undergoing a significant overhaul in its tax system: increases in CGT, abolishing long-standing non‑dom status rules, adjustments to employer national insurance, and property‑related tax changes are just a few of the major shifts. In Europe, reform is being driven by harmonizing rules, enhancing transparency, and adapting to digital economies.

Staying ahead of these changes is not just about compliance — it’s about strategic tax planning, preserving value, and making informed decisions. If you’d like help assessing how these tax reforms impact you, your finances, or your business, our advisory team is ready to assist.