Spring Budget 2024: What You Need to Know

In what is likely to be his final Budget before the next general election, on Wednesday the Chancellor, Jeremy Hunt, delivered a raft of measures designed to steer the UK economy towards stability and growth.

If you missed his address to the House of Commons, we have broken down Mr Hunt’s policy announcements and analysed how they’re likely to impact you, our clients, and your business.

Tax & National Insurance

Perhaps the day’s most headline-grabbing policy was the Chancellor’s pledge to further reduce National Insurance Contributions (NICs) for both employees and the self-employed, which accounts for 27 million people across the UK.

For employees (Class 1 NICs), the main rate will drop from 10% to 8%, and for the self-employed (Class 4 NICs), from 9% to 6%, effective from next month – it was already scheduled to go down to 8%.

This is the second such adjustment to NICs in the last three months, following the initial two pence reduction that came into force in January. That was the first cut in Class 1 NICs in almost 50 years, and the Chancellor hopes this latest one will serve to lower the tax burden on workers, saving someone on an average salary around £450 a year.

Income tax thresholds, meanwhile, which have been frozen since 2021, will remain as they are until at least 2028.

Elsewhere, in a boost to small businesses, the VAT registration threshold was also increased for the first time in seven years – from £85,000 to £90,000.

And in a move designed to ‘increase revenues through a greater volume of transactions’, the higher rate of property capital gains tax will reduce from 28% to 24%.

The government also announced it will scrap and reform the tax break for wealthy foreign residents in the UK who have non-domiciled tax status (i.e. their permanent home is overseas), raising a potential £2.7bn a year.

Finally, fuel duty will remain frozen at its current rate for the next 12 months. The temporary 5p cut on fuel duty, which was due to end this month, will also be extended. Keeping this at 53p per litre will save drivers, so claims the Chancellor, £50 in the next year.

Business, Growth & Investment

The retail and hospitality sectors, which have been significantly impacted by recent economic challenges, received a boost with the 12-month alcohol duty freeze extension, as well as a 75% business rate relief for eligible properties.

Mr Hunt also told the House that business investment this year will represent over 10% of the country’s GDP, with blue chip companies such as Nissan, Google, and Microsoft amongst those making significant investments.

The government will fund the NHS’s ‘productivity plan’ in full. This investment is hoped to ‘modernise’ the service’s antiquated IT systems. It will cost around £3.4bn but could unlock as much as £35bn in savings over the longer term.

The Chancellor also announced that the government will be reforming the ISA system, as they aim to encourage more investment in UK equities. The UK ISA will take the form of an extra £5,000 tax-free allowance for the public to invest exclusively in this country.

An extra £650m will be invested in the Cambridge Biomedical Campus, as well as a new vaccine manufacturing hub in Liverpool. And there will also be an additional £45m going into medical research, including £3m for cancer research specifically.

Housing & Energy

Addressing the housing and energy sector, the Chancellor announced the abolition of the Furnished Holiday Lettings tax regime. These measures are designed to level the playing field between short-term and long-term lets, encouraging greater property availability for residents. The current tax breaks make it more profitable for second homeowners to let out their properties to holiday makers rather than to long-term tenants to rent. Furthermore, stamp duty relief for those buying multiple dwellings will also be abolished.

Elsewhere, the Household Support Fund, which allows local councils in England to help families with vital support such as food banks, food vouchers and warm spaces will be extended for a further six months beyond the current tax year.

To help make loans for household emergencies more affordable, there will also be an increase to the repayment period for new loans, from 12 months to 24 months, as well as an end to the £90 charge for debt relief orders.

There will be strategic investments in Great British Nuclear, the Green Industries Growth Accelerator, and ‘zero emission vehicle’ and ‘clean aviation’ technology.

Finally, as part of their longstanding ‘levelling up’ agenda, £242m has been earmarked for new housing projects, including in Canary Wharf, in addition to the £188m already allocated for Sheffield, Liverpool and Blackpool.

Pensions

As previously announced, the UK state pension will increase by 8.5% in April, equating to:

  • £221.20 a week for the full, new flat-rate state pension
&
  • £169.50 a week for the full, old basic state pension

Other Announcements in Budget 2024

  • The government will extend the windfall tax on the profits made by oil and gas companies until 2029. This is estimated to raise a further £1.5bn.
  • Full child benefits will now be paid to households where the highest-earning parent earns up to £60,000. The current limit is £50,000.
  • Meanwhile, partial child benefit will be paid when the highest earner earns up to £80,000.
  • Following a consultation, there will be a new levy on vaping from October 2026, to discourage youngsters from taking up the habit.
  • However, to ‘maintain the financial incentive to choose vaping over smoking’, duty on tobacco is to increase from next month.
  • Air Passenger Duty will increase for business class travellers.
  • The tax relief available to UK-based film & TV production companies with a budget of under £15m will rise by 5%, while the 80% cap for visual effects costs will be removed.
  • Tax reliefs for touring and orchestral productions, which was due to end in March of next year, will instead be made permanent.
  • And, for employees, a reminder that, as previously announced, the National Living Wage will rise from £10.42 an hour to £11.44 an hour in April.


Blog written by
Sam Wright
Marketing Manager at

Sam Wright is Danbro’s Marketing Manager. He produces regular content and feature articles on our digital and non-digital channels – and social platforms – for the Danbro Group and its subsidiaries, as well as having responsibility for the Company’s internal and external communications.

His background is in Journalism and Creative Writing, having previously contributed to publications such as The Daily Post, The Lancashire Evening Post, and The Blackpool Gazette.

He is a keen swimmer and avid Manchester United fan (but don’t hold that against him), and he lives in Lancashire with his wife, Sarah.

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