What Was Announced In The Spring Budget 2024?
Inflation to Drop Below 2% in Upcoming Months
This will mean prices rising less fast and so costs for businesses and consumers won’t go up as much. It may also mean interest rates start coming down sooner.
Growth Predicted but Economy in Recession
The economy went into recession at the end of 2023 but it is expected to grow again this year.
Fuel Duty Cut Extended
A 5p Fuel duty cut that was previously brought in but was going to be reversed, is being extended for another year which will mean there won’t be a planned 5p increase in fuel costs in April.
Air Passenger Duty Rising
Air passenger duty for flying premium economy, business class or first class will rise from April 2025.
Alcohol Duty Frozen
Alcohol duty will be frozen until February 2025.
New Duty on Vapes and Increase in Tobacco Duty
There will be a new duty on Vapes from October 2026 and a one-off increase in Tobacco duty too.
VAT Threshold Raised
The VAT threshold will be raised from £85,000 a year to £90,000 a year before you have to register for VAT. This will mean businesses can grow and earn slightly more before needing to register for VAT.
New British ISA Account Introduced
In addition to the existing £20,000 that can be saved into an Isa (Individual Savings Account) tax free each year, there will now be an additional £5000 allowance allowed where that money is invested in British businesses. This should mean more funding available for businesses to invest and grow. There will also be a new British Savings Bond if you can save it for 3 years.
Free Childcare From April
Announced last year, parents of 2 years olds will get 15 hours free childcare from April, and from Sept this will extend to parents of those over 9 months old.
Public Services
A further £6 bn will be invested in the NHS, including £3.4bn for an IT upgrade which it is hoped will make the NHS much more efficient. There was also an announcement for a new public sector productivity plan to make things more efficient across the public sector. Spending Growth will be 1% per year next parliament in public services, however, because certain departments will be given more, this will mean cuts of up to 15% in many government departments.
Property Taxes Regimes Changed
The tax relief regime for furnished holiday lettings and the stamp duty relief when purchasing multiple properties will both be abolished. The capital gains tax paid when selling a residential property that was rented out to tenants will be reduced from 28% to 24% (this affects those with earnings above £50k a year).
Regime for Non-Domiciled Individuals Replaced
The current system for Non-Doms (someone who lives in the UK but their permanent home is abroad) will be replaced with a new system where no tax is paid on foreign income for the first 4 years, and then they pay the same as a normal UK resident.
Child Benefit Charge Threshold Raised
The threshold at which higher earners start repaying child benefit will be raised from £50,000 to £60,000, and it will be withdrawn more slowly (up to the £80,000 threshold). This will mean you can earn more before child benefit is withdrawn.
Further National Insurance Cut of 2p for Employees and The Self-Employed
Employee National Insurance rate will fall another 2p (from 10% to 8%). This is on top of the 2p cut that came in in January. In addition, the National Insurance rate paid by the self-employed will also be cut a further 2p (from 8% to 6%).
National Living Wage Raised
National Living Wage will rise to £11.44 an hour for everyone over the age of 21. This will mean higher wage costs for businesses, but people would have more money to spend on goods and services. It will also rise for those below the age of 21, and for apprentices. For full details, see https://www.gov.uk/national-minimum-wage-rates
Capital Gains Tax Changes
A reminder of a previous announcement on the threshold for capital gains tax (the amount you can gain from selling an asset before paying tax)
2023-24 - £6000
From April 2024 - £3000
This change means it is better to sell assets before 5th April than after it.
Dividends Tax Changes
A reminder of a previous announcement on the threshold for Dividends (the amount you can earn in dividends before paying tax).
2023-24 - £1000
From April 2024 - £500
This change means it is better to take out dividends before 5th April than after it.
Investment Changes
The government will introduce full expensing for lease assets, allowing businesses who lease assets such as cars and machinery to customers, to be able to claim the full expense. The government will confirm the timeline for this. There were also announcements on more government funding for the regions, local regeneration projects, research into clean fuels, nuclear sites, creative industries and life science industries.
Overall Tax Burden
The total tax burden will reach the highest levels since 1948 by 2028.
Other Measures
> The windfall tax on the profits of oil and gas companies will be extended from March 2028 to March 2029.
> The Household Support Fund which helps people struggling with the cost of living will be extended for 6 months.
> New tax credit for independent films costing below £15 million.
> The £90 fee for a debt relief order is being scrapped.
> The tax reliefs for freeport areas will be extended from 5 to 10 years.
You can read more about the changes on HMRC’s website at https://www.gov.uk/government/publications/spring-budget-2024
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