Today, Chancellor Jeremy Hunt announced his 2024 Spring Budget where he summarised the UK economic performance and announced his proposals for tax. We highlight below some of the key tax changes announced.
National Insurance Contributions cut
From April 2024, the main rate of employee National Insurance will be reduced from 10% to 8%. Similarly, the main rate of self-employed National Insurance (Class 4) will reduce by a further 2% to 6%.
The VAT registration threshold increased
Effective from 1 April 2024, the VAT registration threshold will rise from £85,000 to £90,000.
Fuel and alcohol duties frozen
Fuel duty has been frozen for an additional 12 months and alcohol duty has been frozen until 1 February 2025.
Introduction of a UK ISA
A new additional ISA with a £5,000 allowance will be created to invest in UK assets. This will be in addition to the £20,000 that can currently be subscribed into an ISA.
Theatre Tax Relief rates
A permanent extension will be made to tax relief for theatres, orchestras, museums and galleries from 1 April 2025, providing 45%/40% relief for theatres, museums and galleries’ productions, and at 45% for orchestras.
Property tax reforms
The preferential Furnished Holiday Lettings (FHL) tax regime will be abolished from 6 April 2025, meaning that short-term and long-term lets will be treated the same for tax purposes
Stamp Duty Land Tax: Multiple Dwellings Relief will be abolished from 1 June 2024 which will affect people who purchase more than one dwelling at once
Capital Gain Tax: the higher rate of CGT for residential property disposals will be cut from 28% to 24% with effect from 6 April 2024.
Non-domicile tax regime abolished
The current tax regime for non-UK domiciled individuals is being abolished and replaced with a residence-based framework. Under the new system, individuals who have been tax resident in the UK for more than four years will pay tax on their foreign income and gains, as is the case for other UK residents.
Inheritance Tax
The government has announced the intention to move to a residence-based regime for Inheritance Tax and will consult on the best way to achieve this. They also said no changes to IHT will take effect before 6 April 2025.
Agricultural Property Relief will be extended to certain environmental land management agreements from 6 April 2025.
Child Benefit reform
The government will consult on moving to a new system based on household rather than individual incomes. In the meantime, from April 2024 the threshold for the High Income Child Benefit Charge will be raised from £50,000 to £60,000. The rate of the charge will also be halved so that Child Benefit is not be repaid in full until you earn £80,000.
Look out for our full Spring Budget tax update
Tomorrow our tax experts will be releasing our full Spring Budget update. If you would like to receive this update straight into your inbox please sign up for our mailing list and select Tax.
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Craig Walker
Tax Director, Sheffield
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