The key points from the Spring Budget 2024 broken down

You can tell it’s an Election year with the inclusion of a surprising number of tax cuts announced in the Spring Budget 2024.

Here, partners Lindsay Farrer and Alex Dent break down the key points of the Budget announcement.

The economic outlook
Growth is expected to be 0.8% this year increasing to 1.9% next year, which is half a per cent higher than announced in the Autumn Statement.

Inflation has fallen from 11.1% to 4% and is expected to fall to 2% in the coming months.

National insurance contributions cuts from 6th April 2024

Employees National Insurance will be cut from 6th April by a further 2% from 10% to 8%. This could represent a saving of £450 for the average person.

Class 4 National Insurance for self-employed people would be reduced from 8% to 6%.

Property Tax Announcements

Favourable tax treatment that applies to Furnished Holiday Lets (FHLs) will be abolished. This will be introduced in April 2025, and draft legislation will be published in due course.

Headline rate of capital gains tax on residential properties is reduced from 28% to 24%.  This is the higher rate of capital gains tax, there is no reduction in the lower rate.  The £50,270 threshold for higher rate gains is for CGT only, different bands exist for income tax depending on which part of the UK you live in.

Multiple Dwellings relief (MDR) to be abolished from 1 June 2024.  MDR is for England and Northern Ireland only.

High Income Child Benefit Charge (HICBC)

The unfair structure of the HICBC is to be abolished. A consultation is expected on how this can be assessed against household income. Temporary measures will be introduced from 2024/25 to move the threshold from £50,000 to £60,000 and the point at which the benefit is fully withdrawn from £60,000 to £80,000.

VAT threshold increase

The VAT threshold is increasing from £85,000 to £90,000 from 1st April. This is after a seven-year threshold freeze, but is still below the £100,000 threshold many hoped it would be increased to.

Scrapping of Non-Domiciled Taxation

Abolition of the outdated concept of non-domicile and remittance basis was announced and new rules on a residency-based system will be introduced instead. This will commence from April 2025. New “arrivers” to the UK will not pay tax on foreign income and gains for four years, after which they will then pay the same UK tax as other UK residents.

New British ISAs

Introduction of a New ISA that will allow a further £5,000 to be invested in British businesses on top of the current £20,000 limit.

Proposed Income Tax rates and bands for Scotland

2023-24 2024-25
Band Rate Band Rate
Starter £12,571* – £14,732 19% £12,571* – £14,876 19%
Basic £14,733 – £25,688 20% £14,877 – £26,561 20%
Intermediate £25,689 – £43,662 21% £26,562 – £43,662 21%
Higher £43,663 – £125,140** 42% £43,663 – £75,000 42%
Advanced N/A N/A £75,001 – £125,140** 45%
Top Above £125,140 47% Above £125,140 48%

If you have any questions about how the Spring Budget affects you, please get in touch.

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