Spring Budget 2024

Spring Budget 2024

In the Spring Budget 2024, Chancellor Jeremy Hunt made several key announcements that could have significant implications for individuals and businesses across the UK. Here’s a breakdown of the main points and what they might mean for you.

Taxation Changes

• National Insurance Cut: A notable change is the 2p cut in the pound for National Insurance contributions for employees and the self-employed. This aims to ease the tax burden on workers.
• Non-Dom Tax Regime: The budget also outlines plans to replace the non-dom tax regime from April 2025, introducing new rules for UK residents whose permanent home is overseas. There will be a two year transition period with more details set to be announced soon
• New “British” ISA: A new £5,000 UK ISA allowance is introduced for savers investing in “UK-focused” shares, pending a consultation.
• Furnished Holiday Letting Scheme Abolished: The government will abolish the Furnished Holiday Lettings tax regime, eliminating the tax advantage for landlords who let out short-term furnished holiday properties over those who let out residential properties to longer-term tenants. This will take effect from April 2025
• Capital Gains Tax Rate Cut: This measure reduces the higher rate of CGT on residential property gains from 28% to 24%. The lower rate will remain at 18%

Benefits and Support

• Child Benefit Thresholds: The budget increases the threshold for full child benefits to households where the highest-earning parent earns up to £60,000, up from £50,000, and the taper will extend up to £80,000. This will come into effect from 6th April 2024.
• Cost of Living Support: The government will continue its fund to assist those struggling with the cost of living for another six months.

Health and Lifestyle

• Vaping Tax: A new tax on vaping products will be introduced from October 2026, linked to nicotine levels, although vaping is set to remain cheaper than smoking due to a simultaneous increase in tobacco duty.
• Alcohol Duty: The budget extends the freeze on alcohol duty until February 2025.

Transport and Energy

• Fuel Duty: The 5p cut in fuel duty on petrol and diesel will continue for another year, easing the pressure on motorists.
• Energy Sector: The “windfall” tax on energy firm profits is extended until 2029, and significant investment is planned in green energy projects and nuclear energy sites.

Housing

• Multiple Dwelling Relief: MDR is being abolished, effective 1st June 2024, due to not meeting original objectives set out.

Economic Outlook

• Growth and Inflation: The Office for Budget Responsibility forecasts modest growth for the UK economy over the next few years, with inflation expected to fall below the 2% target by the end of June.
• Public Debt: Public debt is projected to rise slightly as a percentage of GDP, with overall government spending growing by 1% in real terms over the next five years.

Business and Investment

• VAT Threshold: Small businesses will see the VAT registration threshold raised from £85,000 to £90,000 from April, potentially easing the administrative burden on small enterprises.
• Business Support: The Covid-era government loan scheme for small businesses is extended until March 2026, and tax reliefs for touring and orchestral productions are made permanent.

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