Chancellor of the Exchequer Jeremy Hunt unfurled his Spring 2024 Budget, which was, packed with proposals aimed at strengthening sustainable growth in the UK economy. However, amidst the fanfare, the question looms: is this budget crafted for enduring growth, or is it a strategic maneuvre tailored for the upcoming general election?
The budget unveiled an array of measures, including anticipated tax adjustments, surpassing the expectations of many political and economic pundits along with an assortment of attention-grabbing changes which included:
- A 2% reduction in employees’ National Insurance Contributions, mirrored for sole traders and the self-employed, eliciting a spectrum of reactions.
- An increase in the VAT registration threshold from £85k to £90k, the first elevation in many years, potentially alleviating burdens for small-scale businesses.
- The debut, post-consultation, of a new UK ISA tailored towards UK equity investments, boasting an enhanced annual limit of £25k—a bid to entice investment in British enterprises.
- The imposition of a new tax on vaping products commencing October 2026, alongside a one-time surge in tobacco duty, aiming to foster a smoke-free generation. An anticipated one-time adjustment in Air Passenger Duty concerning non-economy flights.
- The abolition of the Furnished Holiday Lettings tax regime from April 2025, aligning short-term holiday let tax regulations with those governing long-term property rentals, potentially spurring the availability of affordable housing.
- A reduction in the Capital Gains Tax rate on residential property disposals from 28% to 24%, potentially incentivising increased home availability.
- The cessation of the ‘Non-dom’ tax status, with transitional measures and a new residence-based regime effective from April 2025.
- Alterations to the income threshold for Child Benefit clawback, increasing from £50k to £60k, with a taper extension from £60k to £80k, slated to commence from April 2024, transitioning towards fairness and equity.
- The budget also confirmed the continued freeze on fuel duty and alcohol duty until 2025, alongside the continuation and expansion of tax credits and reliefs for the UK creative industries. Notably, measures supporting Life Sciences, Green sectors, and devolution plans for the north-east of England were emphasized. Furthermore, increased funding for HMRC, focused on combatting tax avoidance, and strengthening the tax advice market framework were underscored.
Intriguingly, the budget also hinted at forthcoming updates regarding an update on the recent consultation ‘Tackling non-compliance in the Umbrella Market’ in April, with expectations for guidance aimed at umbrella workers in the summer.
The Spring 2024 Budget carries substantial implications for various taxpayer groups. We’ll continue to delve into the detail to ensure we’ve got you covered by providing the best advice possible for our umbrella employees and agency partners.