On 6 March 2024, Chancellor Jeremy Hunt delivered the Spring Budget 2024 from the House of Commons, announcing an increase to the VAT threshold and cuts to National Insurance. Nottingham chartered accountants, Clayton & Brewill, provide an overview of key measures announced.
Set against the backdrop of the looming general election, the Chancellor began his Spring Budget 2024 by asserting that the UK economy has dealt with the financial crisis, the pandemic and energy crisis caused by war in Europe, but acknowledged that interest rates “remain high as we bring down inflation.”
The Chancellor went on to indicate an anticipated growth of 0.8% for the current year and 1.9% in 2025. These figures slightly surpass the earlier projections made by the Office for Budget Responsibility during last year’s Autumn Statement, which foresaw growth rates of 0.7% and 1.4%. Subsequent forecasts indicate a further increase to 2% in 2026, followed by a slight decline to 1.8% and 1.7% in 2027 and 2028, respectively.
Describing the Spring Budget 2024 as a “budget for long term growth”, Jeremy Hunt went on to announce a number of key measures and changes for both businesses and individuals.
Spring Budget 2024: what key measures were announced?
Measures for businesses
Growth Guarantee Scheme – The Recovery Loan Scheme has been extended and renamed as the Growth Guarantee Scheme. The scheme provides 11,000s SMEs with access to funding.
VAT registration threshold – From 1 April 2024, the government is increasing the VAT registration threshold from £85,000 to £90,000 for small businesses.
National Insurance – Employee National Insurance contributions have been cut by 2p in the pound, with the Chancellor stating: “It was unfair that workers paid ‘two taxes’ on their salary while unearned income was liable to income tax only.”
Self-employed National Insurance contributions – From 6 April 2024 the main rate of National Insurance contributions for the self-employed will be reduced from 8% to 6%. This is alongside the abolition of Class 2 NICs announced at the Autumn Statement.
Oil and gas windfall tax – The windfall tax on the profits of oil and gas companies has been extended until 2029.
Landlords and Agents – The Chancellor announced that that the furnished holiday lets tax relief would be scrapped. He also said Stamp Duty relief on multiple properties would be abolished, as it was being “regularly abused”. On Capital Gains Tax on property, the Chancellor reduced the top rate from 28% to 24%, which he said would bring in more money as it will cover more transactions.
Personal measures
Non-dom regime – The Government will end the current tax regime for UK non-doms. Under the new regime, anyone who has been a tax resident in the UK for more than four years will pay UK tax on their foreign income and gains.
British ISA – The government will launch a new “British” ISA, which will come in the form of an extra £5,000 tax-free allowance for the public to invest exclusively in the UK.
Alcohol, tobacco and fuel duties – Freeze on alcohol duty, which had been due to end in August, to continue until February 2025. A new tax on vaping products will start in October 2026. Existing tax on tobacco will increase, to maintain the “financial incentive to choose vaping over smoking.”
Household Support Fund – The Government fund for people struggling with cost of living pressures is to continue for another six months.
Debt relief orders – The £90 fee to obtain a debt relief order has been scrapped.
Child benefit – The earnings threshold for child benefit was raised to £60,000 from £50,000.
Other measures
Public sector productivity drive – The Chancellor promised a “landmark public sector productivity plan”. This involves funding for NHS productivity to cut millions of hours lost to outdated IT systems, as well as doubling NHS investment in digital transformation over three years, and investing £2.5bn to cut waiting times.
For further information, the Spring Budget 2024 can be read in full here.
If you’re concerned about any of the measures announced in the Spring Budget 2024, please get in touch with the Clayton & Brewill team. Call us on 0115 950 3044 or send an enquiry here.
