Spring Budget 2024: Tax Updates

The 2024 Spring Budget was delivered today by the Chancellor of the Exchequer, Jeremy Hunt, announcing a variety of significant changes ahead of the General Election later this year.

We have set out the key points which were both expected and surprising:

Significant Changes

• Reforms in the taxation of non-domiciled UK residents from April 2025 – Under the new regime, non-doms who arrive in the UK will not be required to pay Income or Capital Gains Tax on foreign income and gains for the first four years of residency.
• Changes in high-income child benefit charge thresholds – Starting 6 April 2024, the threshold for the high-income tax charge on the benefit will rise from £50,000 to £60,000 and the earnings limit, beyond which entitlement to Child Benefit ceases, will increase from £60,000 to £80,000.
• Abolishment of the Furnished Holiday Let tax regime From April 2025 – The tax breaks that favoured letting properties to holidaymakers over long-term tenants will be removed.

Other Tax & Tax Relief Adjustments

• A reduction in National Insurance Contribution rates for both employed individuals (from 10% to 8%) and self-employed individuals (from 8% to 6%) from 6 April 2024.
• The VAT registration threshold will increase from £85,000 to £90,000 starting 1 April 2024.
• Introduction of a new British ISA with an additional £5,000 tax-free allowance for exclusive UK investments, on top of the current allowance of £20,000.
• Abolishment of multiple dwellings relief on stamp duty land tax.
• Reduction of residential property capital gains tax from 28% to 24%.
   

Duty, Fees and Supports

• For those on Universal Credit, the period for new loan repayments has increased from 12 to 24 months for household emergency loans from the government.
• Government fund for people struggling with cost-of-living pressures to continue for another six months.
• Scrapping of the £90 fee for obtaining a debt relief order.
• Fuel duty frozen for 12 months, with savings of approximately £50 per year for the average driver with a 5p cut on petrol and diesel.
• Alcohol duty frozen until February 2025, extended from August of this year.
• New tax on vaping products from October 2026 and tobacco duty to increase by £2 per 100 cigarettes.
• Increase in air passenger duty for those with business class tickets.
   

Other Notable Changes and Updates

• “Windfall” tax on the profits of energy firms, which had been scheduled to end in March 2028, extended until 2029.
• £120m government fund that invests in green energy projects.
• UK economy forecasted to grow by 0.8% this year and 1.9% next year, with 2% growth projected for 2026.
• Inflation expected to fall below 2% by June, reaching 1.5% next year.
• NHS budget to rise by £2.5bn next year, with an additional £3.4bn allocated for productivity improvements by 2030.

Please contact us if you need to discuss how these changes may affect your business or tax affairs in the coming months.