SPRING BUDGET MARCH 2024

The Chancellor, Jeremy Hunt, delivered his second Spring Budget on 6 March 2024. This Budget aimed to appeal to the taxpaying masses, with cuts to National Insurance and a rise to the threshold for VAT registration. But was it too little, too late for the UK economy?

I’ve summarised the main points, so you can see how the Budget will impact on you as a taxpayer and a business owner.

Main tax measures

National insurance

Employee’s Class 1 National Insurance (income from £1,048 to £4,189 per month) is cut from 10% to 8%, and Class 4 (self-employed, annual profits £12,570 to £50,270) is cut from 8% to 6%.

Employer rates remain unchanged and all bands remain frozen.

Value added tax (VAT)

The compulsory registration threshold for VAT will increase from £85,000 to £90,000, and the voluntary deregistration threshold from £83,000 to £88,000.

Furnished holiday lets

The specific (and more-favourable) treatment for furnished holiday lets will fall away from April 2025 and FHL will be treated the same as residential property letting.  Draft legislation will be published shortly and more information will follow.

Child benefits

From April 2024, the Higher Income Child Benefit Charge now tapers away on income between £60,000 and £80,000, instead of between £50,000 and £60,000.

Previously if someone in receipt of child benefit earned > £50K, 1% of it would be clawed back for every £100 earned over £60K.

From April 2024, it will be clawed back at 1% for every £200 earned over £60K. From 2026, it is intended to change the base to household income, rather than ‘highest earner’.

Capital gains tax

The higher-rate capital gains tax (CGT) charge of 28% on gains on residential property will be reduced to 24%.

Multiple dwellings relief

Multiple dwellings relief is being abolished from June 2024. Previously, where someone purchased, for example, a block of five flats for £2 million, stamp duty was levied as if there were five purchases of £400K each. It will now be levied as a single £1 million purchase.

Non-dom tax

From April 2025 the current non-dom tax system will be replaced by a new relief. This will give new arrivals full relief from UK tax on foreign income and gains for four years, after which they will be fully liable for UK tax on all income, regardless of source.

Other measures

There were some other targeted tax measures of note, to consider:

ISA’s

A new ISA with an annual savings limit of £5,000 on top of the existing £20,000 allowance will be established to encourage investment in UK companies.

British Savings Bonds

New British Savings Bonds delivered through NS&I will be introduced in April 2024 offering savers a guaranteed rate of interest for 3 years.

If you have any worries or concerns following the Spring Budget please feel free to get in touch.