Among the indirect tax Budget announcements is the increase to the VAT registration threshold from 1 April 2024. A new duty on vaping products will also be introduced as well as changes to airport passenger duty and landfill tax rates.

The headline announcement for indirect taxes is that the VAT registration threshold will increase from £85,000 to £90,000 from 1 April 2024. This is the first increase to the threshold since it was frozen with effect from 1 April 2017.

The deregistration threshold will also increase from £83,000 to £88,000.

HMRC estimates that this change will benefit over 28,000 businesses which will no longer have to be VAT-registered.

VAT on carbon credit trading

The government will update the VAT terminal markets order (TMO) to allow for further reform. This will allow HMRC to bring trades in carbon credits within scope of the TMO in due course. This follows a consultation on the TMO in 2023.

Consultation on the VAT treatment of private hire vehicles

As previously announced at the 2023 Autumn Statement, the government has confirmed that it will launch a consultation in April on the VAT treatment of private hire vehicles. This follows the high court ruling in Uber Britannia v Sefton MBC in July 2023.

VAT Retail Export Scheme

The OBR has reviewed its previous estimate of the impact of removing the VAT retail export scheme, or VAT-free shopping, in the UK. It confirmed its view that re-introducing the scheme would be a net cost to the government. However, the government welcomes any further submissions in response to the OBR’s findings.

Vaping products duty

A tax on vaping products will be introduced in the UK from 1 October 2026. Businesses will be able to register for the duty from 1 April 2026.

HM Treasury has published a 12-week consultation on the design of the tax. However, the duty rates , which will vary depending on the amount of nicotine in the product, have already been announced:

Nicotine (mg per ml) Rate (£ per 10ml) 
 0  1
 0.1 – 10.9  2
 >11mg  3


To ensure there remains a financial incentive to switch from smoking to vaping, the government is also increasing tobacco duty by £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026.

Fuel duty

The government has kept rates of fuel duty at their current levels for a further 12 months. The planned increase in line with inflation has been cancelled, as it has been every year since 2011. The temporary 5p cut to fuel duty has also been extended.

Alcohol duty

Alcohol duty has been frozen for a further six months. It was due to increase from 1 August 2024 but will now be kept at its current rates until 1 February 2025. As a result, the average pint of beer will be subject to 2p less duty than if the planned duty increase had gone ahead.

The alcohol duty stamps scheme will be closed following a review by HMRC. The scheme was designed to combat fraud by requiring physical stamps on certain types of alcoholic drinks.

Air passenger duty

Rates of air passenger duty (APD) will increase in line with RPI. However, rates for those flying in premium economy, business and first class, and for private jet passengers, will be further adjusted for recent high inflation to ensure they maintain their real terms value.

Landfill tax rates

The rates for landfill tax will be adjusted to better reflect actual RPI. The standard rate per tonne will increase to £126.15. The lower rate will increase to £4.05 per tonne.

ICAEW Analysis of Budget 2024

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