Earlier today the Chancellor, Jeremy Hunt, announced the 2024 Spring Budget in Parliament. The aim of the budget was to promote long-term growth by delivering lower taxes, better public services and more investment.

Here is a breakdown of some key take-home messages from the announcement.

Personal Taxes

National Insurance for employees drops from 10% to 8%

As expected, the rate of national insurance that employees will have deducted is being reduced from 10% to 8% from the 6th of April.

This change will see millions across the UK get a slight increase in their take-home pay each month. The change is set to save someone earning around £35,000 a year an extra £450 per year.

National Insurance for self-employed individuals drops from 8% to 6%

Those who are self-employed will also see a drop in their national insurance payments, with their rates being dropped by 2% as well from 6 April.

This change will save the average self-employed worker £650 when combined with cuts made in the Autumn Statement.

High-Income Child Benefit Changes

The High-Income Child Benefit Charge is set to be assessed on a household basis (rather than on an individual basis) by April 2026 and it was announced that there will be immediate support for working families by increasing the household income threshold by 20% to £60,000 while Child Benefit will no longer need to be repaid in full until earnings exceed £80,000.

This change is set to save over half a million families an average of £1,260 and will put an end to the current unfairness where two parents earning £49,000 a year receive the full Child Benefit while a household with a single earner on over £50,000 does not.

Our comments: The 2% drop in National Insurance for both employees and the self-employed was highly anticipated but will give most individuals a noticeable increase in their pay, which will be important for the Conservatives in this election year. Again, the high-income child benefit was an anticipated change – increasing the thresholds after over 10 years of no changes.


Property Taxes

Furnished Holiday Lettings tax regime and Multiple Dwellings Relief for SDLT – Abolished

The Furnished Holiday Lettings tax regime will be abolished from April 2025, raising £245 million a year while making it easier for local people to find a home in their community.

Multiple Dwellings Relief will be abolished from June. This change comes after showing no evidence of promoting investment in the private rented sector – raising £385 million a year.

Higher rate tax rate on Capital Gains Reduced for residential property

It was announced that the higher rate of Capital Gains Tax (CGT) on residential property will be cut from 28% to 24% from April 2024.

The Chancellor hopes this change will fire up the residential property market and support thousands of jobs that rely on it.

Our comments: the furnished holiday letting changes and the CGT changes were not expected. The CGT changes are of course to be welcomed by higher-rate taxpayers but we do not feel that the 28% rate put off investors from making a sale in the past.


Business Taxes

SMEs to Benefit from (slight) Increase in VAT Threshold & Larger Investment

A change in the VAT threshold was announced. The change will see the threshold for VAT registration will be increasing from £85,000 to £90,000 from April which will take around 28,000 small businesses out of paying VAT altogether.  The threshold had remained at £85,000 for the past 7 years.

Full Expensing for Leased Assets

In the coming weeks, draft legislation will be published to extend full expensing to leased assets when affordable to do so, strengthening one of the most attractive capital allowance regimes of any major country.

Our comments: we feel like the VAT threshold could have been increased by a lot more than £5,000 and will not benefit too many of our clients in a significant way. Relaxation to the full expensing rules are only to be welcomed.


Other Areas

‘Non-Domicile’ Tax Regime Changes

The Chancellor also took steps to make the tax system simpler and fairer. The ‘non-dom’ tax regime will be abolished and replaced with a fairer system from April 2025 where new arrivals to the UK pay the same tax as everyone else after four years – raising £2.7 billion a year by 2028/29.

British ISA

A reform to pensions and savings was also announced.

This included the introduction of a new UK ISA which will allow an additional £5,000 annual investment in UK equities tax-free and new British Savings Bonds offering savers a guaranteed rate for 3 years, which will deliver better returns for savers.

Our comments: the ability to contribute an extra £5,000 per year in addition to the existing ISA allowance of £20,000 is welcome news, albeit with the restrictions in place. The non-dom tax changes will have stolen the thunder somewhat from Labour – which has been on their policy agenda for some time.


If you have any questions about the 2024 Spring Budget and would like to get advice on how it will impact your business or personal finances, please don’t hesitate to get in touch with us, we’d be happy to answer any questions you have.


You can read the full statement here