The Spring Budget of 2024 was a highly anticipated fiscal statement, given the UK’s technical recession at the end of 2023 and the impending general election. Chancellor Jeremy Hunt’s speech focused on delivering tax breaks, boosting investment, and tackling unfairness in the UK tax system. The Chancellor’s plans for a pre-election tax giveaway had to be somewhat reined in, given the limited fiscal headroom shown through The Office of Budget Responsibility’s (OBR) economic report.

Key Personal Measures

  • The Chancellor’s major announcement was a 2p cut to National Insurance contributions (NICs) in April, on top of the 2p he already cut in last year’s Autumn Statement. Employees will now pay 8% from April. This cut would reduce workers’ NIC rates by 4% in less than six months.
  • Other personal measures included extending the freeze and 5p cut on fuel duty for a further 12 months, cutting the higher capital gains tax (CGT) rate on residential property sales, and reforming the high-income child benefit charge (HICBC) to increase the threshold and make the system fairer for single-earner households.

Key Business Measures

  • For businesses, Hunt promised enhanced funding for ‘high-growth industries’ and focused support for the creative sector. The VAT threshold will also rise from £85,000 to £90,000 in April, reducing the administrative burden for tens of thousands of businesses.
  • In addition to this and following a 1% cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will fall by a further 2% – from 8% to 6% from April.

Revenue-Raising Initiatives

  • To pay for these changes, the Chancellor announced several revenue-raising initiatives, such as replacing the current tax regime for non-domiciled individuals (non-doms), a new levy on vaping products, and an extension of the windfall tax levy on oil and gas companies.
  • Hunt also abolished the furnished holiday lettings relief, claiming this move would raise capital and improve the availability of long-term rental properties.

Living Standards

  • In November, the OBR forecast that living standards, as measured by real household disposable income (RHDI) per person, would fall by 1.5% in 2024, and then increase by an average of 1.5% between 2025 and 2028.
  • In the March Spring Budget, it said that living standards are now expected to recover more quickly than previously forecast and grow by around 1% a year on average, and it now expects real household disposable income per person to return to pre-pandemic levels by 2025.

The full changes announced in the Spring Budget can be found in our guide, which can be downloaded here. If you have any queries about the upcoming changes, please reach out to us today.

A close up photo of a blue calculator displaying the word 'VAT', whilst sat on some files