2024 UK Spring Budget Summary
Today, 6th March 2024, Chancellor Jeremy Hunt made his eagerly awaited 2024 Spring Budget Statement. At the forefront of today’s address was a strong emphasis on fostering economic growth, with particular attention directed towards stimulating business investment and bolstering employment opportunities across the UK.
However, amidst the promises of tax cuts, concerns loom regarding the Government’s persistent freeze on tax free thresholds, potentially offsetting any immediate tax benefits. Mr. Hunt was reportedly considering a cut to income tax but ultimately no announcements were made on this matter. The tax cuts announced are set to be financed through a mix of tax increases elsewhere, targeting business class airfares, owners of short-term holiday lets, vapes, and tobacco users. Changes have also been announced for Capital Gains Tax (CGT) which will affect those wanting to sell or gift a residential property.
See how the 2024 Spring Budget could affect you and your business by reading our summary of key changes below.
Please note: Several updates have been issued subsequent to the Autumn budget announcements in October 2023. To access a summary of the Autumn Budget, please click here: https://www.abacni.co.uk/uk-2023-autumn-budget-summary/
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Companies
- The Autumn 2023 budget announced that full expensing for new IT, machinery and equipment is now permanent – For every £1 that a business invests in, their corporation tax is cut by up to 25p
- Full expensing will now extend to allowing firms to claim tax relief for leased assets as well
- A further £200m will be provided to the post-pandemic Recovery Loan Scheme which lends money to small businesses to boost growth
- The registration turnover threshold for VAT increased from £85k to £90k
- VAT and Corporation tax rates remained the same
- Funding of approximately £150million to develop an Enhanced Investment Zone for NI.
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Self Employed
- Self-employed Class 4 national insurance cut from 8% to 6% from 1st April 2024
- No changes to the previous announcement to abolish class 2 National Insurance from April 2024, saving the average self-employed person £192 a year
- The registration turnover threshold for VAT increased from £85k to £90k
- No Changes to VAT, Income, Inheritance or Stamp Duty Land Tax rates
- A further £200m will be provided to the post-pandemic Recovery Loan Scheme which lends money to small businesses to boost growth
- Self-employed Class 4 national insurance cut from 8% to 6% from 1st April 2024
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Employers
- Employee National Insurance rate will be cut by a further 2 percentage points from 10% to 8%, from 1st April 2024
- National Living Wage increases were announced in the Autumn 2023 budget. Click here for more information on these changes
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Property Taxes
- Stamp duty relief for people who purchase more than one property in a single transaction has been abolished
- Furnished Holiday Lettings relief will be abolished from April 2025
- The higher rate of Capital Gains Tax (CGT) will be cut from 28% to 24% from April 2024 for residential property sales.
- No other CGT rate changes announced
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Individuals
Child Benefit- From 6 April 2024 the level of earnings at which you start paying some of the benefit back – will rise from £50,000 to £60,000.
- In addition, the earnings limit at which you stop being entitled to Child Benefit will increase from £60,000 to £80,000.
- To help make the system fairer, a consultation will launch in due course which will examine whether to change child benefit eligibility to being based on household income rather than on individual income by April 2026.
The ‘non-dom’ tax regime
- Non- domicile refers to the tax status of a person who is UK resident but their permanent home is abroad.
- Currently, non-doms only have to pay tax on money earned in the UK, while their overseas income and wealth are not subject to UK tax – and they can benefit from the status for up to 15 years.
- From April 2025, new arrivals to the UK will not have to pay tax on foreign income and gains for the first four years of their UK residency.
- After that, they will pay the same tax as other UK residents. Transition arrangements will be allowed for current non-doms.
Universal Credit Recipients
- Longer repayment period for people on benefits taking out emergency budgeting loans from the government
- £90 fee to obtain a debt relief order scrapped
- Government fund for people struggling with cost of living pressures to continue for another six months
Other
- A £150 million investment to develop an Enhanced Investment Zone for N.Ireland
- A commitment of £2million to boost global investment and trade opportunities for N.Ireland
- The long term plan for towns has been extended to a further 20 areas across the UK – this includes Derry/Londonderry and Coleraine
- £100 million in additional funding for N.Ireland executive
- Employee National Insurance rate will be cut by a further 2 percentage points from 10% to 8%, from 1st April 2024, this puts £900 a year back into the average worker’s pockets combined with changes announced in the Autumn Statement.
- Introduced duty on vaping products from October 2026 plus one-off duty on tobacco products
- Frozen the fuel duty for the 14th year in a row for another 12 months, maintaining the 5p cut
- Extended the alcohol duty freeze until February 2025
- Business class airfare passengers to be hit with higher duties
- New ISA British investment allowance of £5,000 a year plus new NS&i British savings bond
- “Windfall” tax on the profits of energy firms, extended until 2029
- New tax reliefs and investments to help establish the UK as a world leader in high-growth industries such as the creative sector, advanced manufacturing and life sciences.