30.7.2024 | Tax

This month, King Charles delivered the King’s Speech at the State Opening of Parliament, outlining the government’s plans and priorities for the upcoming year. This speech, drafted by the current government, highlights 40 new pieces of legislation that could directly impact businesses and financial stability.

The King’s Speech detailed legislation aimed at fostering economic stability, enhancing trade, and improving financial decision-making. Here are some of the key points:

Economic Outlook

• Economic Stability: The Budget Responsibility Bill was announced. It aims to enhance financial decision-making by allowing the Office of Budget Responsibility (OBR) to independently scrutinise significant spending and tax charges.

• Trade and Investment: Plans to improve the UK’s trade agreement with the EU, support recovery from the cost-of-living crisis, and encourage business investments and job creation.
• Taxation: The Labour manifesto’s proposal to remove the VAT exemption from private school fees was highlighted. The upcoming budget will address other tax changes, likely in September or October.

Business and Regulatory Reform

• Audit Market: The Audit and Corporate Governance Bill seeks to improve investor confidence by establishing the Audit Reporting and Governance Authority (ARGA) as an oversight body, potentially affecting companies with audited accounts.
• AI Regulation: The government plans to introduce legislation for further regulation of Artificial Intelligence.

Employment and Pensions

• Pension Reforms: The Pension Schemes Bill aims to boost investment in domestic businesses, increasing returns for pension savers.
• Employment Rights: The Employment Rights Bill and Draft Equality (Race and Disability) Bill focus on enhancing employment rights, banning exploitative practices, and ensuring equal pay.
• Apprenticeship Levy: Reforms are planned around this, along with the establishment of ‘Skills England’ in partnership with employers.

Housing and Infrastructure

• Leasehold and Commonhold Reform: Draft legislation will further reform these areas, banning new leasehold flats and making commonhold the default tenure while addressing ground rent and maintenance costs.
• Planning and Infrastructure: The Planning and Infrastructure Bill aims to reform the planning process and accelerate the delivery of quality infrastructure and housing.

Energy

• Renewable Energy: The Great British Energy Bill will establish Great British Energy, a publicly owned clean power company in Scotland, focusing on renewable energy investments.

Transport

• Rail and Bus Services: The Rail Reform Bill and the Passenger Railway Services (Public Ownership) Bill will reform railway franchising and bring several train operators into public ownership. The Better Buses Bill will grant local leaders control over bus services.

Health

• Tobacco and E-cigarettes: The Tobacco and Vapes Bill will gradually raise the legal age for tobacco purchases and impose e-cigarette sale restrictions.
• Junk Food and High-Caffeine Drinks: New regulations will target the marketing and sale of these products, particularly to children.

Andrew Diver, Beatons‘ head of taxation, said: “The King’s Speech largely confirmed Labour’s pre-election promises. Renewable energy investments may benefit businesses by providing potential economic stability and reduced energy costs. However, they should also prepare for increased regulatory burdens. Taxation details remain pending until the next budget.”

For more details, see the full speech here.

Image: Andrew Diver