UK Spring Budget 2024
Written by Sach
The Spring Budget 2024 has introduced a sweeping array of tax changes aimed at easing the financial strain on households, energising businesses, and stimulating the UK economy’s growth. Here’s a comprehensive overview of the key tax changes announced by the Chancellor and their broader impact.
For Households and Individuals
- Alcohol Duty Freeze Extended to February 2025: This move is set to benefit 38,000 pubs across the UK, supporting the hospitality sector.
- Universal Credit Loan Repayment Period Doubled: From 12 to 24 months, making emergency loans more manageable for recipients.
- Debt Relief Order Charge Abolished: Eliminating the £90 charge, easing the burden on individuals seeking financial respite.
- Household Support Fund Extension: A lifeline for people on low incomes, extended for another six months to aid those struggling with the cost of living.
- Fuel Duty Freeze Extended for 12 Months: Aiming to alleviate the financial pressure on motorists, saving the average car driver £50 next year.
- National Insurance Cut: A further 2p cut from 10% to 8% for employees, and from 8% to 6% for the self-employed, reducing the tax burden on millions.
- High Income Child Benefit Charge Threshold Increase: From £50,000 to £60,000, reducing the tax burden on families and encouraging economic participation..
For Businesses
- Full Expensing Tax Break Extended to Leased Assets: Encouraging businesses to invest in new equipment and technology.
- VAT Registration Threshold Increase: From £85,000 to £90,000, simplifying tax compliance for small businesses.
- New Pension Requirements: Pension funds must now disclose their level of investment in UK equities, promoting domestic investment.
For the Creative and Life Sciences Industries
- Increased Support for Film and TV: Enhanced tax relief for visual effects and a new tax credit for UK independent films to bolster the creative sector.
- £26 Million Funding for The National Theatre: Upgrading stages to maintain the UK’s status as a global capital of creativity.
- Life Sciences Sector Boost: An additional £45 million for medical research, highlighting the government’s commitment to combatting diseases like cancer, dementia, and epilepsy.
For the Public Sector and Infrastructure
- Public Sector Productivity Plan: Aimed at maximizing the efficiency of public spending, ensuring taxpayer money is used effectively.
- £2.5 Billion Additional NHS Funding: Focused on reducing waiting times and enhancing healthcare services across the UK.
Key Economic Forecasts
- Inflation Expected to Fall Below 2%: Signaling relief from the cost-of-living crisis.
- Economic Growth Projections: The OBR forecasts growth of 0.8% this year, with a notable increase to 1.9% next year, signaling a positive economic trajectory.
Additional Tax Changes
- Introduction of a New Excise Duty on Vaping Products: From October 2026, alongside a one-off increase in tobacco duty, to maintain the financial incentive for healthier smoking alternatives.
- Reform in Air Passenger Duty: Adjusting rates for business class flights to reflect high inflation rates in recent years.
- Property Taxation Reform: Including the abolition of tax relief on holiday lets and a reduction in the higher rate of Capital Gains Tax on property sales from 28% to 24%.
Windfall Tax and Non-Dom Status Overhaul
- Non-Dom Tax Status Abolished: Replaced with a new residency-based system, making the tax system fairer and more equitable.
- Extension of Windfall Tax on Oil and Gas Company Profits: Until 2029, ensuring these companies contribute their fair share.
The Spring Budget 2024 outlined how this Conservative government attempts economic recovery, supporting struggling households, and tries to lay the groundwork for future prosperity. By implementing tax cuts, extending support schemes, and investing in key sectors, the government aims to stimulate growth, enhance public services, and ensure the UK remains a competitive and attractive place for business and work.
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