UK 2024 Spring Budget

Today, 6th March 2024, the Chancellor of the Exchequer, Jeremy Hunt, announced the Spring Budget speech and set out the government’s plans to bring forward a series of reforms to the tax system.

Some of the highlights are as follows

National Insurance contributions (NICs) – the government has announced a cut to the main rate of Class 1 employee NICs from 10% to 8% from‌‌‌ ‌‌6‌‌‌ ‌‌April 2024, and a further cut of 2 pence to the main rate of Class 4 self-employed NICs from 6‌‌‌ April‌‌‌ 2024, taking this to 6%. Alongside these cuts, the government announced that it will consult on Class 2 NICs abolition later this year.

Capital Gains Tax (CGT) – the government will legislate to reduce the higher CGT rate for residential property disposals from 28% to 24%. The change will take effect for disposals that take place on or after 6‌‌‌ April 2024. The lower rate of 18% will remain unchanged.

UK Individual Saving Account (ISA) – the government has announced that it intends to introduce a UK ISA with a new £5,000 allowance, in addition to the existing ISA allowance, and has launched a consultation on its design and implementation.

Improving Payment Options for Income Tax Self-Assessment (ITSA) – the government will improve and simplify HMRC’s digital services to support Income Tax Self-Assessment taxpayers seeking to pay tax in instalments.

Value Added Tax (VAT) – the government has announced a number of VAT related measures, one of which being that the VAT threshold will increase to £90,000 from 1‌‌‌ April‌‌‌ 2024, and the level at which a business can apply for de-registration will increase from £83,000 up to £88,000.

Some of these changes are well received, particularly the NIC cuts and higher VAT registration threshold, particularly given that high rates of inflation have seen many businesses raise their prices and forced them beyond the VAT threshold.

If you have any questions or concerns relating to the announcements of the spring budge, email us at dcall@gyfinance.co.uk