Spring Budget 2024 - Key Points

The UK Spring Budget is an important event where the government announces its plans for managing the country's finances for the upcoming year.

Some key points from the UK Spring Budget typically include updates on economic growth forecasts, changes to taxation policies, spending priorities, and measures to support businesses and individuals. In recent budgets, there has been a focus on addressing the impact of the COVID-19 pandemic, supporting the economic recovery, and investing in key sectors such as healthcare, education, and infrastructure. The Chancellor of the Exchequer usually outlines measures to boost economic growth, create jobs, and ensure public finances are managed effectively.

Additionally, the UK Spring Budget often includes announcements related to initiatives to tackle climate change, support green industries, and promote sustainability. The government may introduce incentives for businesses to adopt environmentally friendly practices, invest in renewable energy sources, or reduce carbon emissions. This reflects the growing importance of environmental issues and the need to transition towards a more sustainable economy. Overall, the UK Spring Budget plays a crucial role in setting the direction for the country's economic policies and priorities for the year ahead, shaping the financial landscape for businesses and individuals.

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So, in the last scheduled budget before the general election later this year - what are the main things you need to know??

Tax and income support

• Non-dom tax regime, for UK residents whose permanent home is overseas, to be replaced with new rules from April 2025
• National Insurance, a payroll tax, cut by 2p in the pound for employees and the self-employed
• £5,000 "British ISA" tax allowance for individual savers to invest in UK-listed companies
• Longer repayment period for people on benefits taking out emergency budgeting loans from the government
• £90 fee to obtain a debt relief order scrapped
• Government fund for people struggling with cost of living pressures to continue for another six months
• High Income Child Benefit Charge (HICBC) – the government has announced it will raise the HICBC income threshold from £50,000 to £60,000 from 6‌‌‌ April‌‌‌ 2024, and the taper will be extended up to £80,000. The government intends to move to a system based on household rather than individual income by April‌‌‌ 2026, and will consult in due course
• Capital Gains Tax (CGT) – the government will legislate to reduce the higher CGT rate for residential property disposals from 28% to 24%. The change will take effect for disposals that take place on or after 6‌‌‌ April 2024. The lower rate of 18% will remain unchanged
• UK Individual Saving Account (ISA) – the government has announced that it intends to introduce a UK ISA with a new £5,000 allowance, in addition to the existing ISA allowance, and has launched a consultation on its design and implementation•improving Payment Options for Income Tax Self Assessment (ITSA) – the government will improve and simplify HMRC’s digital services to support Income Tax Self Assessment taxpayers seeking to pay tax in instalments

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Cigarettes, vapes and alcohol

• Freeze on alcohol duty, which had been due to end in August, to continue until February 2025
• New tax on vaping products to start in October 2026, following a consultation
• Existing tax on tobacco to increase, to maintain the "financial incentive to choose vaping over smoking"

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Transport and energy

• Fuel duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year
• £160m deal for UK government to purchase site of planned Wylfa nuclear site in north Wales
• "Windfall" tax on the profits of energy firms, which had been scheduled to end in March 2028, extended until 2029
• Air passenger duty, the tax paid on flights, to go up for business class tickets

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Public debt, inflation and the economy

• Office for Budget Responsibility predicts UK economy to grow by 0.8% this year and 1.9% next year
• Growth of 2% predicted for 2026, with 1.8% in 2027 and 1.7% in 2028
• UK's inflation rate forecast to fall below 2% target "in just a few months' time"
• Underlying debt, excluding Bank of England debt, forecast to be 91.7% of GDP this year, rising to 92.8% next year
• Overall day-to-day government spending to grow by 1% in real terms over next five years

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Business and investment

• Threshold at which businesses must register to pay VAT raised from £85,000 to £90,000 from April
• HMRC will establish an expert advisory panel to support the administration of research and development (R&D) tax reliefs
• New permanent rates of relief (40% and 45%) for theatre, orchestra and museums and galleries exhibition tax, and additional support for independent film through a new UK Independent Film Tax Credit at a rate of 53% for films with budgets under £15 million that meet the conditions of a new British Film Institute test. In addition, the government is providing a 5% increase in tax relief for UK visual effects costs in film and high-end TV, under the Audio-Visual Expenditure Credit (AVEC)
• Stamp Duty Land Tax (SDLT) – a range of SDLT measures have been announced, including:
  - First Time Buyers’ Relief will be extended to individuals who use nominee and bare trust arrangements when buying a new lease over a dwelling that they intend to use as their main or only residence
  - the government has announced the abolition of Multiple Dwellings Relief, a bulk purchase relief within the SDLT rules available on the purchase of two or more dwellings. The government will engage with the agricultural industry to determine if there are any particular impacts for the sector that should be considered further
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Other measures

• £1m for a memorial to honour Muslims who fought for Britain during World War One and Two
• A new tax credit for independent UK films with a budget of less than £15m

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If you need help with annual accounts, personal tax, bookkeeping or Xero, please get in touch and one of the team will be happy to help.

Thanks for stopping by,

Charlotte

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