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The UK Spring Budget 2024: The Key Points to Know

On 6 March, the Chancellor of the Exchequer, Jeremy Hunt has delivered his Spring Budget 2024. The government has focused on “Long Term Growth” in this budget by lowering taxes, more investment and better public services.

After the pandemic and then energy crisis caused by war in Ukraine, the UK economy has faced with financial crisis. To bring the inflation down, the higher interest rates are remained in place. The SMEs are suffering from losses due to the increase in costs. The working-class people are struggling to meet their usual living standard.    

On this budget, the Chancellor focuses on reducing taxes so that people may have extra money to support their living costs. Do you think this budget fulfil our expectation? In this article, I will write some key points of the Spring Budget 2024 and this might help to make your plan.   

The Key Points of Spring Budget 2024

 
  • NI Contribution Rates: The Class 1 employee NICs will be lowered to 8% from 10% (2p cut) and Class 4 NICs (paid by self-employed) will be reduced by 3p (from 9% to 6%) from 6 April 2024. These deductions will help individuals to have extra money to support their living costs.
  • Child Benefit Charge: The threshold for the high-income child benefit charge will be raised to £60k (currently £50k) from 6 April 2024 and the tapered charge is between £60k and £80k. This is a good step for high income taxpayers. 
  • Non-domiciled Individuals: The government will be introduced a new residence based regime from 6 April 2025 and this will eliminate the current tax regime for non-UK domiciled individuals. This will help to earn additional revenue for the government. 
  • Capital Gains Tax: The higher rate of CGT rates on residential properties will be reduced to 24% from 28% from 6 April 2024 and the lower rate remain at the current rate of 18%. This looks like a good news, but people are expecting more like increase in annual exempt amount. 
  • Furnished Holiday Lettings: The Furnished Holiday Lettings tax regime will be stopped from April 2025.
  • HMRC Digital Services: The government will improve and simplify HMRC digital services from September 2025 for individual taxpayers seeking to pay tax in instalments.
  • IHT Administrative Reform: From April 2024, The personal representative of estates will no longer need to have commercial loans to pay IHT before applying to obtain a “grant on credit” from HMRC. 
  • VAT Threshold: The VAT registration threshold is increased to £90k from £85k and the deregistration threshold to £88k from 1 April 2024. This change is after 7 years (£85k threshold introduced in April 2017) and this is obviously a good news for micro businesses.  
  • Stamp Duty Land Tax: The multiple dwellings relief will be abolished from 01 June 2024.
  • Regulation of Tax Advisers: A consultation is launched by the government into raising standard in the tax advice market, a fantastic step by the government.

However, I think that the Chancellor could do something more on his budget and some are as follows:

  • A consultation on increasing the personal allowance so that people could have some extra money to support their living costs.
  • Rethinking on dividend tax which was increased in line with the NI raise. However, there are some reductions in NIC but dividend tax is remained the same. Even, the dividend allowance is reducing gradually.
  • There should be a consultation on corporation tax for SMEs and find any possible way to reduce this.
  • The property market is struggling due to the high interest rate and therefore, people are paying extra rent. If there are some schemes for the prospective first-time buyers, it might help. For example, due to the high rent and other day to day expenses, the first-time buyer cannot manage deposit, but their monthly income could support for mortgage eligibility.  

The above is just some key notes of the budget and my thoughts based on my experience. To see the details of the budget, we will recommend looking at the government website. 

We will be happy to help you on accountancy, taxation and business support needs from here at The Stan Lee and please get in touch with us to get our services.