Spring Budget 2024 Highlights
Jeremy Hunt delivered his fourth statement as Chancellor of the Exchequer with a Budget focused on long-term growth and improving domestic prospects. The biggest issues that he looked at addressing included productivity, taxation and domestic market support.
Employee National Insurance – Following on from the Autumn Budget’s National Insurance cuts, a further cut will be made to Employee National Insurance from 10% down to 8% on earnings between £15,270 and £50,270. It is estimated that this cut will give employees a further boost of up to £754 pa in net pay.
Self-Employed National Insurance – Similarly to Employees, Self-Employed National Insurance will also be cut from 9% to 6% on annual profits between £12,570 and £50,270. This is in combination with the 1% cut previously announced and is estimated to generate a saving of up to £1,131 pa in addition to the £179 Class 2 National Insurance saving previously announced.
British ISA – Investors will have a new, dedicated, additional £5,000 British ISA (BRISA) Allowance for UK shares, designed to entice investors into a greater allocation towards UK stocks. The same tax advantages will apply, meaning that assets held within the BRISA are free from tax on growth, capital gains and withdrawals. Consultations are to be held to further define the rules of the BRISA, including the eligibility criteria, allowing the use of funds (with a minimum of 75% invested in the UK, excluding Cash) and the possible inclusion of UK Corporate and Government Bonds.
British Savings Bond – With backing through NS&I, the government will issue new British Savings Bonds from early April. They will be new 3-year fixed-rate issues of NS&I’s Guaranteed Growth and Guaranteed Income Bonds, which were last on sale in 2019, and offer a guaranteed rate for investments between £500 and £1,000,000.
Furnished Holiday Lettings – The Chancellor confirmed that the favourable tax treatment of Furnished Holiday Lettings will be abolished from April 2025. This means that the ability to claim capital allowances on the properties, as well as favourable Income Tax and Capital Gains Tax treatment, will come to an end.
Stamp Duty on the Purchase of Multiple Dwellings – Multiple Dwellings Relief currently applies to multiple property purchases in one transaction (eg. a block of flats) but is now set to be abolished from June 2024. It will still be available to any property purchases where contracts are exchanged by 6th March 2024 and to any purchases completed before 1st June 2024.
Capital Gains Tax on Property – In an attempt to boost supply in the housing market, and backed up by OBR forecasts, the higher rate of Capital Gains Tax applying to gains on residential properties will be cut from 28% to 24%. The lower rate of 18% for gains within the basic rate band remains unchanged.
Non-Domicile System – The current non-dom tax regime, which offers tax advantages to people who like in the UK but are not settled permanently, is to be abolished and replaced with a new residency-based system in April 2025. People who move to the UK will not pay taxes on their foreign income or gains for the first 4 years but will later be charged at the same rate UK domiciled individuals.
High Income Child Benefit Charge – In a move to a fairer household income test, the High Income Child Benefit Charge thresholds have been raised. The lower threshold moves from £50,000 to £60,000 and the upper threshold moves from £60,000 to £80,000. Consultations will be made with a view to move towards a household system in April 2026.
VAT Threshold – For the first time in 7 years, the VAT registration threshold has been increased from £85,000 to £90,000 from 1stApril 2024.
If you wish to talk over any of the Spring Statement changes and how they may impact on your position, please feel free to contact your adviser at any time.
Who are Vizion Wealth?
Our approach to financial planning is simple, our clients are our number one priority and we ensure all our advice, strategies and services are tailored to the specific individual to best meet their longer term financial goals and aspirations. We understand that everyone is unique. We understand that wealth means different things to different people and each client will require a different strategy to build wealth, use and enjoy it during their lifetimes and to protect it for family and loved ones in the future.
All of us at Vizion Wealth are committed to our client’s financial success and would like to have an opportunity to review your individual wealth goals. To find out more, get in touch with us – we very much look forward to hearing from you.
DISCLAIMER:
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES, OF AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.
“The information contained in this article is intended solely for information purposes only and does not constitute advice. While every attempt has been made to ensure that the information contained on this article has been obtained from reliable sources, Vizion Wealth is not responsible for any errors or omissions. In no event will Vizion Wealth be liable to the reader or anyone else for any decision made or action taken in reliance on the information provided in this article”.
