Welcome to the 2024 Spring Budget Newsletter from Walsh & Co
Jeremy Hunt cuts NICs again in the Spring Budget
The Chancellor made further changes to NICs following the cuts made in the Autumn Statement 2023. The rates for NICs will be cut by two percentage points for both employees and the self-employed from 6 April 2024.
This will see Class 1 employee NICs reduced from 10% to 8% from 6 April 2024, down from 12% at the end of last year. Meanwhile, Class 4 self-employed NICs are cut from 9% to 6% from 6 April 2024.
Mr Hunt made a number of other changes that will relieve the tax burden on businesses, families and motorists. He cut the higher rate of capital gains tax on residential property disposals from 28% to 24%. The lower rate will remain at 18% for any gains that fall within an individual's basic rate band.
The threshold for VAT registration will be lifted from £85,000 to £90,000 from 1 April 2024. According to the government, this will mean 28,000 businesses will no longer be VAT registered in 2024/25.
Fuel duty will remain at its current rate and be frozen for 2024/25. Alcohol duty is also frozen for 2024/25.
The Budget saw the creation of a new ISA that will allow people to invest in UK-focused assets. The new UK ISA creates an allowance of £5,000. This will be in addition to the £20,000 that can be subscribed into an ISA. The government will consult on the details.
The Chancellor made his cut to NICs possible with a series of tax raising measures. These include the abolition of the Furnished Holiday Lettings regime and Multiple Dwellings Relief, alongside a new duty on vaping and an increase in tobacco duty.
In addition, the Chancellor announced a one-off adjustment on Air Passenger Duty (APD) rates for non-economy passengers.
The government is also extending the Energy Profits Levy, also known as the windfall tax on oil and gas companies, by an additional year to March 2029 as gas prices are forecast to remain 'abnormally high' until that time.
The UK's tax rules for non-UK domiciled individuals will be replaced with a residence-based regime that Mr Hunt says will raise £2.7 billion in revenue.
This new regime will commence on 6 April 2025 and applies UK-wide. Individuals who opt in to the new regime will be exempt from UK tax on foreign income and gains for their first four years of residence in the UK, while the government will make transitional arrangements for existing non-doms.
For a detailed overview of the 2024 Spring Budget and what the measures mean for you and your business, visit our summary: Spring Budget summary
WHAT THEY SAID
'A plan to grow the economy, a plan for better public services, a plan to make work pay, growth up, jobs up and taxes down.'
Jeremy Hunt, Chancellor of the Exchequer
'They know the thresholds are still frozen, dragging more and more people into higher taxes.'
Keir Starmer, Leader of the Labour Party
'We needed a Budget that introduced a Wealth Tax, and reformed capital gains tax and national insurance to raise over £50 billion per year.'
Carla Denyer, Co-Leader of the Green Party
'The reduction in high marginal tax rates for working parents, alongside cutting national insurance contributions (NICs), offers a broad set of measures that will incentivise work at a time when access to labour represents a major obstacle to business growth.'
Rain Newton-Smith, Chief Executive of the Confederation of British Industry (CBI)
'The prospect of an additional 200,000 entering into the workforce, due to cuts in national insurance, would make a significant dent in the job vacancies holding back our economy.'
Shevaun Haviland, Director General of the British Chambers of Commerce (BCC)
For the full Budget announcements visit:
https://www.gov.uk/government/publications/spring-budget-2024