It’s the time of year again when the Chancellor of the Exchequer has unveiled the much-anticipated Spring Budget, outlining the Government’s plans for taxation and spending. Let’s dive into the highlights of the 2024 Budget to help you understand what it means for you.
National Insurance Cuts
One of the headline announcements in this year’s Budget is the reduction in the main rates of National Insurance contributions (NICs) for both employees and the self-employed. Effective from April 2024, the Class 1 employee NICs will see a significant cut from 10% to 8%, while Class 4 employee NICs will drop from 8% to 6%. This move aims to put more money back into the pockets of workers and self-employed individuals.
High-Income Child Benefit Charge (HICBC)
Families across the UK will welcome the changes to the High Income Child Benefit Charge (HICBC). The threshold for HICBC will rise from £50,000 to £60,000 starting in April 2024. Also, the rate at which this charge is applied will be halved, making sure that Child Benefit is not entirely withdrawn until individuals earn £80,000 or more. These changes give families some relief while ensuring that benefits are taken away more fairly.
Taxation of Non-Doms
A big change in the Budget is the end of the tax rules for those not from the UK (‘non-doms’). From April 2025, a new residence-based tax regime will be introduced, making sure that all UK residents pay the same tax on their foreign income and gains after living in the UK for over four years. This move aims to simplify the tax system and promote fairness for everyone living here.
Capital Gains Tax and Stamp Duty Land Tax
Great news for property owners. The Budget is cutting the higher rate of Capital Gains Tax for selling residential properties from 28% to 24% starting in April 2024. And if you’re into buying multiple properties, get ready because Multiple Dwellings Relief in the Stamp Duty Land Tax system is being axed from June 2024. These changes are all about boosting the property market and encouraging people to invest.
Furnished Holiday Lettings
For landlords, changes are on the horizon concerning furnished holiday lettings. From April 2025, the Government will end a tax advantage for landlords who let short-term furnished holiday properties over those who let residential properties to longer-term tenants. This aims to create a level playing field in the rental market.
Fuel Duty and Alcohol Duty
Good news for motorists and drinkers alike – not to be done at the same time, obviously! Fuel duty will remain frozen for another year, extending the temporary 5p cut and making sure that duty rates are not increased with inflation. Similarly, alcohol duty will be frozen from August 2024 until February 2025, providing relief for consumers.
Tobacco and Vaping Duties
In a bid to incentivise healthier choices, a new duty on vaping products will be introduced from October 2026. Tobacco duty will be increased from the same date, maintaining the financial incentive to choose vaping over smoking.
Air Passenger Duty and VAT Threshold
Passengers flying premium economy class, business, and first class, and those travelling by private jet, will see increased rates in Air Passenger Duty from 2025/26 to account for recent high inflation. What’s more, the VAT threshold will be increased from £85,000 to £90,000 in April 2024, providing relief for small businesses.
Energy Profits Levy and Household Support Fund
The Energy Profits Levy, introduced in response to the rise in oil and gas company profits, will be extended to 2028/29. Also, the Household Support Fund, aimed at helping those most in need with rising costs of living, has been extended to September 2024.
Spring Budget 2024: A Diverse Mix of Tax Measures
The Spring Budget 2024 presents a mixed bag of tax measures and announcements aimed at encouraging economic growth, supporting families, and ensuring the tax system is fair for everyone. From cuts in National Insurance contributions to reforms in property taxation and incentives for healthier choices, the Budget sets the stage for a more inclusive and fruitful future. As these changes occur, it’s important to remain up-to-date and adjust to the shifting world of taxes and government spending.
Get Expert Guidance
If you’re eager to optimise your tax strategy, don’t miss out on this chance to make a difference. Reach out to us today for expert advice and support. Whether you prefer a personalised phone call or the convenience of filling out our user-friendly online form, we’re here to help you every step of the way. Call 01603 630882 now to connect with our team or simply complete our online form to kickstart the process. Let’s work together to transform your tax strategy into a powerful catalyst for growth post-budget and beyond.
