A “Budget for long-term growth” – Chancellor Jeremy Hunt
With the UK entering a technical recession at the end of 2023 and a general election on the cards this year, Chancellor Jeremy Hunt was under pressure to deliver a Spring Budget that demonstrated fiscal responsibility and generosity.
Dubbing the fiscal statement a ‘Budget for long-term growth”, Hunt focused his speech on delivering tax breaks, boosting investment and tackling unfairness in the UK tax system.
One of the Chancellor’s most significant announcements was a 2p cut to National Insurance Contributions (NICs) in April, on top of the 2p he already cut in last year’s Autumn Statement. Workers will see their NIC rates fall by four percentage points in less than six months.
Other personal measures included extending the freeze and 5p cut on fuel duty for a further 12 months, cutting the higher Capital Gains Tax (CGT) rate on residential property sales, and reforming the High Income Child Benefit Charge (HICBC) to increase the threshold and make the system fairer for single-earner households.
For businesses, Hunt promised enhanced funding for ‘high-growth industries’ and focused support for the creative sector.
The VAT threshold will also rise from £85,000 to £90,000 in April, reducing the administrative burden for tens of thousands of businesses.
To pay for these changes, the Chancellor announced several revenue-raising initiatives, such as replacing the current tax regime for non-domiciled individuals (non-doms), a new levy on vaping products and an extension of the windfall tax levy on oil and gas companies. Hunt also abolished the Furnished Holiday Lettings relief, claiming this move would raise capital and improve the availability of long-term rental properties.
We’ve outlined the main announcements from the statement below and have put together a report with all the details, which you can download here >
Personal announcements
NIC cut
Following a 2p cut in the Autumn Statement, the main rate of employee National Insurance will fall again in April by a further 2p, from 10% to 8%.
Non-dom status abolished
Following calls to overhaul the “outdated” tax rules for non-UK domiciled individuals, Hunt announced that the non-dom regime will soon be replaced by a simpler system.
HICBC threshold raised
The government also introduced changes to make the High Income Child Benefit Charge (HICBC) fairer for single-income families.
HICBC will be administered on a household rather than an individual basis by April 2026, with a consultation in due course. Until then, around half a million working families will benefit from an increase in the HICBC threshold from £50,000 to £60,000, with the threshold at which child benefit is fully repaid increasing to £80,000, effective from April 2024. According to the government, this will save the average family around £1,260 a year.
British ISA introduction
To channel more investment into UK equities, the UK ISA will allow individuals an additional £5,000 per year tax-free, on top of the existing ISA allowance (currently £20,000 per year) to invest in UK-focused assets.
Higher CGT rate on residential property to be reduced
The higher rate of Capital Gains Tax (CGT) on residential property will be cut from 28% to 24% from April 2024.
Fuel duty cut to remain
The main fuel duty rates will now remain frozen until March 2025 and the temporary 5p cut to the duty has also been extended. The government estimates these measures will save car drivers around £50 in 2024/25 and £250 since the 5p cut was introduced, resulting in a total £5bn tax cut across the nation.
See details of all personal announcements in our Spring Budget Report:
Business announcements
VAT registration threshold increase
In a boost for small businesses, the VAT registration threshold will increase from £85,000 to £90,000 from 01 April 2024. This marks the first increase in seven years.
Furnished Holiday Lettings regime abolished
In a move to make the property market fairer for renters, the Furnished Holiday Lettings (FHL) regime will be abolished from April 2025.
The change aims to increase long-term rental options for locals and raise tax receipts to help fund National Insurance cuts. It is estimated that the change will raise around £300m from landlords who benefited from the FHL scheme.
Recovery Loan Scheme to be extended
The government will extend the Recovery Loan Scheme with £200m of additional funding, and will rebrand it as the Growth Guarantee Scheme. This program aims to help around 11,000 SMEs access the financing they need to invest and expand.
Investment Zones launch
In April, the first Investment Zones will launch in the North of England and the Midlands. These zones will offer tax breaks and planning liberalisations to attract business investment.
For full details of all business announcements made, read our full Spring Budget Report:
We can help
If you have any questions about how the announcements in the Spring Budget may affect you, your family or your business, please get in touch
