In today’s Spring Budget, termed a Budget for Long Term Growth, Chancellor Jeremy Hunt announced ‘more tax cuts for working people, more investment and a plan for better public services’.
Key announcements for people included:
Taxation of non-UK domiciled individuals
From 6 April 2025, the existing non UK-domicile (non-dom) tax regime will be replaced with a new relief on foreign income and gains available for the first four years of UK tax residency, with transitional arrangements.
Homeownership and long-term lets
From 6 April 2024, the higher rate of Capital Gains Tax (CGT) for residential property disposals will be cut from 28% to 24%. The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.
From 6 April 2025, the Furnished Holiday Lettings tax regime will be abolished.
From 1 June 2024, Multiple Dwellings Relief – bulk purchase relief in the Stamp Duty Land Tax regime in England and Northern Ireland – will be abolished. Property transactions with contracts that were exchanged on or before 6 March 2024 will continue to benefit from the relief regardless of when they complete, as will any other purchases that are completed before 1 June 2024.
National Insurance Contributions (NICs)
From 6 April 2024:
- The main rate of Class 1 employee NICs will be cut from 10% to 8%
- The main rate of Class 4 self-employed NICs will be cut from 8% to 6%
Photo: HM Treasury (Twitter/X)
High Income Child Benefit Charge (HICBC)
From 6 April 2024:
- The HICBC threshold will be raised to £60,000
- The rate at which the HICBC is charged will be halved so that Child Benefit is not fully withdrawn until individuals earn £80,000 or higher
- The Government will consult on administering the HICBC on a household basis rather than individual
Fuel duty
- Fuel duty rates for 2024/25 will be frozen
- The temporary 5p cut in fuel duty rates will be extended until March 2025
- The planned inflation increase for 2024/25 will not take place
Photo: HM Treasury (Twitter/X)
Alcohol duty
Alcohol duty will be frozen from 1 August 2024 until 1 February 2025.
UK ISA
The Government will create an additional Individual Savings Account (ISA) with a £5,000 tax-free allowance. This would be in addition to the £20,000 that can be subscribed into an ISA.
Photo: HM Treasury (Twitter/X)
Key announcements for businesses included:
VAT registration
From 1 April 2024:
- The VAT registration threshold will be raised from £85,000 to £90,000
- The deregistration threshold will be raised from £83,000 to £88,000
Film, TV and creative industries
A UK Independent Film Tax Credit will be introduced at a rate of 53% on qualifying film production expenditure. Eligible productions can make claims from 1 April 2025, in respect of expenditure incurred from 1 April 2024 onwards.
From 1 April 2025, the Audio-Visual Expenditure Credit rate for visual effects costs in film and high-end TV will be increased to 39%. For qualifying expenditure for visual effects costs, the 80% cap will be removed.
Energy Profits Levy
The Energy Profits Levy will be extended by an additional year to 2028/29.
As part of efforts to simplify tax admin and tackle the tax gap, other announcements included:
- A further £140 million investment to improve HMRC’s ability to manage tax debts
- A consultation to seek views on how best to implement the Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard
- Legislation in the Spring Finance Bill 2024 will ensure individuals cannot use a company to bypass anti-avoidance legislation, known as Transfer of Assets Abroad (ToAA) provisions, in order to avoid UK income tax
- From 1 April 2024, personal representatives of estates will no longer need to have sought commercial loans to pay inheritance tax before applying to obtain a ‘grant on credit’ from HMRC
Our Spring Budget 2024 coverage also includes:
