Spring 2024 Budget Announcements

spring budget

Earlier today, Chancellor Jeremy Hunt delivered the Spring Budget, which probably marks his final budget in the current sitting of parliament.

The Chancellor began by stating that the economy is now starting to improve. The Office of Budget Responsibility (OBR) is forecasting inflation to reach 2% in the next few months, and growth in 2024 is predicted to be 0.8%. Additionally, we can expect the economy to grow by 1.9% in 2025.

Jeremy Hunt also announced that the government is now able to assist working families with the cost of living through tax cuts.  So let’s look at what those tax cuts look like.


Changes to Personal Tax including the Self-Employed

  • The rates for Basic and Higher Personal Tax remain unchanged.
  • Millions have been dragged into higher tax brackets as income tax thresholds remain frozen. There was still no movement in the thresholds.
  • A 2% reduction in the main National Insurance (NIC) rate was announced for the new tax year starting on April 6th, 2024, lowering the rate to 8%.
  • The self-employed will also see a fall in their Class 4 National Insurance (normally paid with Self-Assessment Tax) from April 2024 as the main rate will be reduced by 2% to 6%. The Autumn statement last year had already announced a reduction of 1% to 8%.
  • The threshold for the High Income Benefit Charge will be increased from £50,000 to £60,000. The tapering limits will be between £60,000 to £80,000.  What this means is you will loose all child benefit once you reach £80,000.
  • The limit is per earner and not per household. Mr. Hunt did say there will be a household-based system from April 2026.
  • A reform to the ISA system was announced whereby you will be able to invest £5,000 in British Investments. This is in addition to the current £20,000 annual allowance.


Changes to Business Tax

  • The VAT threshold is increased from £85,000 to £90,000 staring in the new tax year.
  • The Chancellor also has plans to introduce full expensing of leased assets.


Changes to Property Tax

  • The higher rate of 28% for Capital Gains Tax relating to residential investment property has been reduced to 24%.
  • Furnished Holiday Lets (FHL) are going to be abolished. This means what used to be treated as a trading income will now be treated like any other rental income.  There are a few consequences not least capital allowances.  If you are currently using the FHL rules please get in touch with your normal manager so we can start putting a plan together.
  • The abolishing of the multiple dwelling relief for Stamp Duty was also announced.


Non Dom Status

Whilst many of us were expecting this announcement, it still came as an unusual announcement from a Conservative government.

This feels like a political move, but the fact remains the “non-dom” status will be abolished.  This move is expected to generate an extra £2.7billion per year.

From April 2025 the current system will be replaced by a “modern, simpler and fairer “ system.


What happens next?


There were a lot of announcements made today during the budget speech.  We will deliver some deeper insights into those announcements later this week.

However in the meantime should you have any questions, please get in touch with your normal manager.

If you are not yet working with us, why not look at how we work and see we can help you.