Spring Budget 2024 Summary

In what appears to be his final pre-election Budget, Jeremy Hunt has introduced a range of tax and spending measures that will impact small businesses and landlords across the UK.

The Chancellor has outlined several significant changes, including further reductions in National Insurance (NI) contributions, an increase in the VAT registration threshold, and adjustments affecting travel, lending, and property management for small business owners and landlords.

Here are the key highlights extracted from the Chancellor's speech and HM Treasury's report:

1. National Insurance Cuts:

   • Effective from April 6th, the main rate of Class 4 self-employed NI contributions will decrease to 6%, providing savings for self-employed individuals.

   • Additionally, the Class 1 employee’s NI contributions main rate will be reduced from 10% to 8%.

   • The compulsory Class 2 self-employed NI contributions have been abolished since last November's Autumn Statement.

2. VAT Registration Threshold Increase:

   • The VAT registration threshold will rise from £85,000 to £90,000 starting April 1st, 2024, affecting businesses' VAT obligations.

   • The VAT de-registration threshold will also increase to £88,000, allowing for de-registration if VATable sales fall below this level.

3. Extension of Recovery Loan Scheme:

   • The Recovery Loan Scheme, aimed at aiding businesses affected by the Covid-19 pandemic, will now run until the end of March 2026, offering government guarantees on loans to SMEs. It will not be renamed the Growth Guarantee Scheme.

4. HMRC Guidance on Retraining Tax Deductibility:

   • New HMRC guidance allows for the tax deductibility of training costs for the self-employed, enabling the reduction of taxable profits. The guidance ensures that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are allowable costs.

5. Abolishment of Furnished Holiday Lettings Regime:

   • The Furnished Holiday Lets (FHL) regime will be abolished in April 2025, aligning tax treatment for short-term and long-term lets.

6. Reduction in Higher Rate of Capital Gains Tax on Property:

   • The higher rate of Capital Gains Tax (CGT) on residential properties will decrease from 28% to 24% starting April 6th, 2024. The lower rate will remain at 18% ( rate dependent on your earnings)

7. Introduction of New UK ISA and Increased ISA Allowance:

   • A new UK ISA with a tax-free allowance of £5,000 will be launched, increasing the overall tax-free investment allowance to £25,000.

8. Increase in High Income Child Benefit Charge Threshold:

   • The threshold for High Income Child Benefit Charge will increase from £50,000 to £60,000 from April 6th, 2024, with Child benefit being fully repayable at £80,000

9. Duty Rise for Business Class Airfares:

   • Air Passenger Duty (APD) for premium economy, business, and first-class passengers will increase, while APD for economy passengers will remain frozen.

10. Fuel Duty Freeze:

    • Fuel duty will be frozen for another year, extending the initial cut introduced until March 2025.

For further details on these Budget changes, the full report is available on the government’s website.

Any questions please do contact us on 01869 323887 or jamie@tax-ninja.co.uk.