Spring Budget Update 2024 - March 7th 2024

Our summary of the Spring Budget delivered by the Chancellor Jeremy Hunt on Wednesday 6 March.

In what was widely expected to be Mr Hunt’s final Budget ahead of an election, speculation in the final run up focused on the trade-offs that might be required around cutting taxes and meeting both fiscal rules and spending commitments. Ultimately the Chancellor had it both ways, with some headline grabbing measures aimed at easing the tax burden on earners and families, while also introducing some tax increases to cover their costs.

In a speech punctuated by several interventions from the Deputy Speaker for order, there were some key headline items:

• The main class 1 national insurance contribution (NIC) rate will drop from 10% to 8% from 6 April 2024, the second cut in six months.
• The main rate of class 4 self-employed NICs will similarly reduce from 8% to 6%.
• The high income child benefit charge (HICBC) will be reformed. The threshold increases to £60,000 from April 2024, while the rate at which the charge is levied will be halved, so that child benefit will not be fully withdrawn until an individual’s income reaches £80,000.
• The capital gains tax exempt amount is reduced from £6,000 to £3,000 for 2024/25.
• For residential property disposals, the higher rate of capital gains tax (CGT) will be cut from 28% to 24% from 6 April 2024.
• A new UK individual savings account (ISA) will create an additional £5,000 allowance on top of the current £20,000 ISA limit.
• The furnished holiday letting tax regime will be abolished from 6 April 2025.
• From 1 April 2024, the VAT registration and de-registration levels will be increased to £90,000 and £88,000 respectively.
• The non-domicile rules will be replaced with a new regime based on residence from April 2025.
• Multiple dwelling relief within the stamp duty land tax (SDLT) regime for England and Northern Ireland will be abolished from 1 June 2024.
• Alcohol and fuel duties are frozen.
• Following the abolition of the pension lifetime allowance, there are two new allowances – the lump sum and death benefit allowance pegged at £1,073,100 and lump sum allowance at £268,275.
• The dividend allowance for 2024/25 has been cut from £1,000 to £500.

As ever the Budget publications contained a wide range of detailed proposals and much to digest. Our Budget Summary above highlights the key aspects likely to affect you. If you have any questions about what you should do next, please get in touch.