Chancellor delivers Spring Budget: National Insurance cuts, small business VAT threshold increases, and more

Chancellor of the Exchequer Jeremy Hunt was widely expected to double down on tax cuts and small business support in his Spring Budget for 2024. No doubt conscious of the fact that this is an election year, Mr Hunt went some way to meet those expectations. He claimed his economic plan could grow the economy while cutting taxes, and contrasted this to the Labour Party’s “no plan.”

“Growth up, jobs up, taxes down. I commend this Statement to the House,” he said, concluding his speech earlier today. Here are the main points:

New British ISA announced

Mr Hunt said he will reform the ISA system to encourage more investment into UK assets. The government will create a “British” ISA – an additional £5,000 tax-free allowance for the public to invest exclusively in the UK. He said:

“This will be on top of the existing ISA allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand.”

2% cut to National Insurance

The Chancellor has announced a fresh 2% cut to National Insurance contributions for employees from 6 April, worth around £450 a year for workers on the average UK salary. This follows on from a similar cut in last year’s Autumn statement.

“Abolishing” the non-dom tax system

Mr Hunt has announced that he is abolishing the current non-dom tax regime and replacing it with a new one. From April 2025, new arrivals in the UK won’t pay tax on foreign income unless they stay in the country. If they do, then they will be taxed like any other UK resident. According to Mr Hunt, this will raise £2.7 billion a year.

Changes to property taxation

The Chancellor announced that the higher rate of property capital gains tax will be slashed from 28% to 24%. However, he also announced the abolition of stamp duty relief for people buying more than one dwelling. Also on the way out is the “furnished holiday lettings regime” – a tax break which makes it more favourable to let second homes to holiday makers than long-term tenants.

VAT registration threshold to increase

The threshold for VAT registration will increase from £85,000 to £90,000, with the Chancellor promising that full expensing will apply to lead assets “as soon as he can afford it,” according to the BBC. Mr Hunt added:

“Business investment has risen from an average of 9.3% of GDP under Labour to 9.9% under the Conservatives. This year it will be 10.6% of GDP – generating £30bn more in business investment than if it had continued at Labour levels. And it is still going up.”

Funds for housebuilding projects

Mr Hunt has announced the provision of more funds for house building. He has allocated £188 million for projects in Sheffield, Blackpool and Liverpool, and £242 million in Barking Riverside and Canary Wharf.

Further support for households

The Chancellor announced a six-month extension to the Household Support Fund, a freeze on alcohol duty, and an extension to the 5p cut in fuel duty. Along with from April earners on up to £80,000 will get child benefit, rather than £60,000 currently.

If you would like to discuss the impact of the Spring Budget on your business or personal finances, call JW Hinks on 0121 456 0190. Our experienced team of experts can help you ensure you are making the most of every opportunity available.