Spring Budget Update 2024

General Market Update

Jeremy Hunt delivered his latest financial update as the Spring Budget was announced on 6th March 2024. The significant outcomes of the budget are as follows:

 

UK ISA (or British ISA). The UK ISA will be a new ISA with its own Β£5,000 annual allowance. It will only allow you to invest in UK-based companies to encourage growth in UK markets. The UK recognised stock exchanges are: Aquis Stock Exchange, Cboe Europe Limited, the London Stock Exchange and the Alternative Investment Market (AIM). Transfers from the UK ISA to another type of ISA will not be permitted. The government are likely to introduce rules around cash holdings in the new UK ISA, but nothing has been confirmed in this budget.

 

Inheritance Tax (IHT). The government announced its intention to move to a residence-based regime for Inheritance Tax (IHT) purposes and will consult on the best way to achieve this in due course. No changes to the current IHT regime will take effect before 6th April 2025.

 

Furnished Holiday Lettings. The Furnished Holiday Lettings (FHL) tax regime will be abolished with effect from 6th April 2025, meaning short-term and long-term lets will be treated the same for tax purposes. Individuals with FHL and non-FHL properties will no longer need to calculate and report their income separately.

 

National Insurance Contributions (NICs). Highlights are as follows:

  • The government is cutting the main rate of Class 1 employee NICs further, from 10% down to 8%.
  • Together with cuts announced in the 2023 Autumn Statement, this provides an overall 4p tax cut for 27 million working people.
  • The government will also support self-employed individuals by cutting the main rate of Class 4 self-employed NICs to 6%.
  • Hunt also announced a consultation to fully abolish class 2 National Insurance.

 

High Income Child Benefit Charge (HICBC). From 6th April 2024, the government is increasing the HICBC threshold from Β£50,000 to Β£60,000. The rate at which this will be charged will also be halved. Therefore, Child Benefit is not withdrawn in full until individuals earn Β£80,000 or more.

 

Capital Gains Tax (CGT). The higher rate of 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. Private Residence Relief will remain in place, meaning the vast majority of residential property disposals will not pay any CGT.

 

Small and Medium- Sized Enterprises (SME). The VAT registration threshold for SMEs will be increased from Β£85,000 to Β£90,000. This will take effect from 1st April 2024.

 

Alcohol and fuel duties. The government is extending the alcohol duty from 1st August 2024 until 1st February 2025, resulting in 2p less duty on an average pint of beer than if the planned increase had gone ahead.Β Fuel duty rates will remain frozen at 52.95p per litre for 2024-25.

 

The government are planning to provide all NHS staff with digital passports and access to a new NHS Staff App, upgrading IT systems, scaling up existing use of AI to ensure all NHS staff are equipped with modern computing technology.

 

Oil and gas windfall tax. The windfall tax on the profits of oil and gas producers will be extended until 2029, with the aim of raising Β£1.5 billion in tax.

 

Inflation forecasts. Inflation has more than halved, falling from its peak of 11.1% (in October 2022) to 4.0% (in January 2024). The Office for Budget Responsibility (OBR) forecasts that inflation will return to the 2% target next quarter, a year earlier than forecast in November 2023.

 

Correct as of 8th March 2024. Certain conditions and factors may apply.

Information is subject to change and dependent on individual circumstances.

Further information and advice is available on request.

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