Spring Budget 2024 – What’s New?
- TBA
- Mar 8, 2024
- 2 min read
Updated: Mar 4
On the 6th March 2024, the chancellor Jeremy Hunt announced the Government’s new Spring Budget, which outlines the Government’s fiscal policies for the new financial year.
So, what has changed?
We’ve focused on the key points that are likely to affect your personal finances and business operations.
1. National Insurance
The headline change announced in the Spring Budget is another 2% cut to National Insurance (NI) contributions, from 10% down to 8%. The chancellor had previously already announced a 2% cut last year (from 12% to 10%).
With this additional reduction, the overall NI contribution rate has been reduced by one third. The chancellor stated that this decision was aimed at boosting economic growth by ensuring that workers are better off, and therefore able to spend more.
It is estimated that up to 27 million employees will benefit from an average of a £900 gain per year as a result of the additional cut. In addition, up to 2 million employees are estimated to gain around £650 per year.
2. Property Taxes
Capital Gains Tax (CGT) for residential properties will be reduced from 28% to 24%. The government expects the lower tax rate to stimulate the rate of property transactions in the market.
The Furnished Holiday Lettings Scheme will be abolished – it will become more expensive for landlords to rent out property for short-term holiday lets.
The Multiple Dwellings Relief Scheme will also be abolished. This scheme was originally designed to reduce the amount of stamp duty paid when purchasing multiple properties in a single transaction. Any transactions completed or substantially completed by the 1st June 2024 will no longer be eligible for the scheme.
3. VAT registration threshold increase
The VAT registration threshold will be increased from £85,000 to £90,000. Government estimates suggest that this means an additional 28,000 small businesses will not need to pay VAT.
4. Abolition of the ‘non-dom’ tax regime
The chancellor announced that the non-domiciled tax status will be phased out.
The non-domiciled tax status is an arrangement where UK residents can declare a permanent home outside the UK for tax purposes, which could be then be used to avoid paying UK tax on overseas earnings.
The status will be replaced by a new scheme that is due to be announced later.
TB Accountants will provide further guidance once the announcement has been made.
5. New UK ISAs
A new ‘UK ISA’ will be introduced to provide an additional £5,000 ISA allowance for investments in UK businesses.
The new ISA allowance is in addition to the existing £20,000 general ISA allowance.
What happens next?
Of course, many other policies were also announced by the chancellor as part of the Spring Budget which we haven’t outlined here. You can get in touch with us for further details.
If you’re not sure how the changes announced by the Spring Budget affect you, or you need further advice, TB Accountants is here to provide tailored support.