The Chancellor’s Spring Budget 2024 introduced several key measures aimed at individuals, businesses, and specific sectors:
For Individuals:
- A notable change involves the abolishment of the non-domiciled tax status, set to be replaced by a new system based on residency starting April 2025. This new system will exempt foreign income and gains from UK tax for the first four years of UK tax residency.
- The Budget also announced a reduction in Capital Gains Tax rates for residential properties from 28% to 24%.
- Changes to the High Income Child Benefit Charge are planned, with a system based on household income to be introduced by April 2026. Until then, the threshold at which the benefit starts to reduce will be increased to £60,000, with a taper for earnings between £60,000 and £80,000.
- A new ‘British ISA’ is being introduced with an additional £5,000 allowance for investments in UK assets.
For Businesses:
- There will be an increase in the VAT registration threshold from £85,000 to £90,000 effective from 1 April 2024.
- Extension of the windfall tax Energy Profits Levy for oil and gas for an additional year, ending March 2029.
- Various enhancements in tax reliefs for the creative industries, including a 5% increase for visual effects in film and high-end TV and the introduction of a new tax credit for UK independent films with budgets under £15 million.
Employment and Pensions:
- From 6 April 2024, the Employee’s Class 1 National Insurance Contributions (NICs) main rate will be reduced from 10% to 8%, and for the self-employed, the Class 4 NIC rate will decrease from 8% to 6%.
- The Budget outlines intentions to reform pension systems to enable workers to take their pension pots with them when changing jobs.
These measures reflect the government’s efforts to adjust tax policies in anticipation of the next general election and to address the current economic challenges faced by individuals and businesses in the UK.
Our full summary, which will be released shortly, will delve deeper into these measures, providing detailed analysis and commentary on the implications for the economy, businesses, and individuals. It will also explore additional aspects of the Budget not covered in this brief overview, offering comprehensive insights into the government’s fiscal strategies and their potential impact on various sectors.
