On 6 March, the Chancellor, Jeremy Hunt delivered his Spring Budget, declaring it was “a Budget for long-term growth.” The Chancellor said his policies would help build a “high wage, high skill economy” and deliver "more investment, more jobs, better public services and lower taxes."
Below are some key points:
Cost of living measure
The Chancellor announced measures to help families deal with cost-of-living pressures including:
- an extension to the Household Support Fund at current levels for a further six months
- maintaining the ‘temporary’ 5p cut on fuel duty and freezing it for another 12 months.
- an extension of the freeze in alcohol duty until February 2025
National Insurance Contributions (NICs)
Following previous changes to National Insurance Contributions (NICs) from January 2024, the government announced further changes to take effect this April:
- The main rate of employee NICs will be cut by 2p in the pound from 10% to 8%, which, combined with the 2p cut in January, is estimated to save the average worker around £900 a year.
- A further 2p cut from the main rate of self-employed NICs (on top of the 1p cut announced in the Autumn Statement), meaning that from 6 April 2024 the main rate of Class 4 NICs for the self-employed will reduce from 9% to 6%.
Child Benefit
The Child Benefit system will be based on household rather than individual incomes by April 2026.
- From April 2024 the threshold for the High-Income Child Benefit Charge will be raised to £60,000 from £50,000.
- Also, that Child Benefit is not lost in full until an individual earns £80,000 per annum.
Savings
To encourage UK savings –the government announced two new savings products, a new UK Individual Savings Account (ISA) and British Savings Bonds:
- The new ISA will have a £5,000 annual allowance in addition to the existing ISA allowance and will be a new tax-free product for people to invest in UK-focused assets.
- British Savings Bonds will be delivered through National Savings & Investments (NS&I) in April 2024, offering a guaranteed interest rate, fixed for three years.
Defined Contribution Pensions
Due to concerns that pension funds only invest around 6% into UK equities, the Chancellor announced plans for Defined Contribution pension funds to publicly disclose the breakdown of their asset allocations, including UK equities working closely with the Financial Conduct Authority (FCA) to achieve this.
Other key points:
- The existing ISA allowance remains at £20,000 and the JISA (Junior ISA) allowance and Child Trust Fund annual subscription limits remain at £9,000.
- The Dividend Allowance reduces to £500 from April 2024.
- The annual Capital Gains Tax (CGT) exemption reduces to £3,000 from April 2024.
- The standard nil rate Stamp Duty Land Tax threshold for England and Northern Ireland is £250,000 and £425,000 for first-time buyers, remains in place until 31 March 2025.
- The Income Tax Personal Allowance and higher rate threshold remain at £12,570 and £50,270 respectively until April 2028 (rates and thresholds may differ for taxpayers in parts of the UK where Income Tax is devolved).
- No changes to Inheritance Tax (IHT) will take effect before 6 April 2025 – £325,000 nil-rate band, £175,000 main residence nil-rate band, with taper starting at £2m estate value.
- The State Pension, as previously announced, will go up by 8.5% in April, which means £221.20 a week for the full, new flat-rate State Pension (for those who reached State Pension age after April 2016) and £169.50 a week for the full, old basic State Pension (for those who reached State Pension age before April 2016).
- The removal of the Lifetime Allowance (LTA) from pensions tax legislation from April.
- As previously announced, the National Living Wage for over-23s – paid by employers – will rise from £10.42 an hour to £11.44 an hour in April.
- Threshold where small businesses must register to pay VAT raised from £85,000 to £90,000 from April 2024.
- Reducing the higher rate of CGT on residential properties from 28% to 24%.
To read our Spring Budget 2024 article in full, please click on the following link:
6 March 2024
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