In the budget announcement on 6th March 2024 Chancellor-of-the Exchequer, Jeremy Hunt outlined the plans to boost the economy by cutting taxes and boost public spending.
One of the most expected changes to current taxes has arrived. Government has decided to reduce Employee’s National Insurance from 10% to 8%.
The main changes in the Spring budget include:
- National Insurance Class 1 – from April 2024 it will be reduced to 8% from the current 10% rate. This means £450 per year extra for an average earners of £35,000. This will benefit 27 million workers.
- National Insurance Class 2 – abolishing from 6 April 2024 for self-employed people with profits above £12,570
- National Insurance Class 4 – cutting the main rate of Self-employed from 9% to 6% from April 2024
- Value Added Tax – The threshold at which businesses are mandated to register for VAT is being increased from £85,000 to £90,000 from 1 April. The deregistration threshold is also being increased from £83,000 to £88,000.
- Capital Gain Tax – The higher residential property Capital Gains Tax rate is set to decrease from 28% to 24%.
- Stamp Duty Relief – From 1st June 2024 The stamp duty relief for buying multiple homes at once, known as Multiple Dwellings Relief, will be scrapped.
- Furnished Holiday Lettings – Abolished from April 2025
- Non-Dom Tax Status – will be removed from April 2025. This change means that foreign nationals residing in the UK but officially domiciled overseas will no longer be able to avoid paying UK tax on their foreign income or capital gains. A more ‘straightforward’ residency-based system is set to be implemented in 2025.
- Fuel Duty – has been frozen for an additional 12 months and the 5p cut to petrol taxes that was introduced in 2022 remains in place.
- Business Rates Relief – Film studios in England meeting eligibility criteria will receive a 40% relief on their gross business rates until 2034. Tax reliefs for touring and orchestral productions are now ‘permanent’ at 45%, and at 40% for non-touring productions.
- New British ISA – is being introduced which will allow a £5,000 annual investment into UK businesses. It includes all the tax advantages of other ISAs and will be on top of any other existing allowances.
- Child Benefits – The high-income Child Benefit Charge is changing to a household-based system from April 2026. In the meantime, from April 2024, the tapering threshold will increase to £60,000, and the full withdrawal limit is being raised to £80,000.
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