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On 29 July 2024, Chancellor Rachel Reeves announced in the House of Commons that she had discovered a spending £21.9 billion ‘black hole’ together with civil servants at HM Treasury.

This was detailed in a Spending Audit document  that says the Office for Budget Responsibility (OBR) produced a forecast at Spring Budget 2024 which was based on inaccurate and incomplete information given to them by HM Treasury.  This is currently under investigation by the OBR and the Chair has written to the Treasury Select Committee instigating a review of the figures that were produced alongside the Spring Budget.

Mrs Reeves instigated changes to fill the black hole, outlined in the above document, including:

  • Restricting Winter Fuel Payments to those in receipt of Pension Credit and some other means-tested benefits from 2024/25
  • Scrapping the Investment Opportunity regime which was announced at Autumn Statement 2023
  • Ending the Rwanda migration partnership which will allow the UK Government to process asylum seeker claims rather than Rwanda, and
  • Cancelling the Advanced British Standard which was proposed by the previous Prime Minister as a ‘Baccalaureate-style qualification' (in England) 

For Bookkeepers 

There are two announcement in the Spending Audit document that will be of interest: 

1.     The Chancellor has set the date for her first Budget as 30 October 2024.  At this time, according to the document, the ‘Chancellor will take further difficult decisions across tax and spending

2.     Exchequer Secretary to the Treasury James Murray made a written statement confirming that VAT on private school fees will apply for terms starting on and after 01 January 2025.  The VAT charge also applies fees that are paid on and after 29 July 2024 if they relate to a term that starts on or after 01 January 2025 

So, members be aware of two diary dates.  The UK Budget (30 October 2024) and VAT on private school fees (01 January 2025).

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