Jeremy Hunt has unveiled this year’s Spring Budget 2024 in the House of Commons today (6th March 2024). Our latest article explores the Chancellors key announcements.
The Chancellors’ opening remarks
The Chancellor, Jeremy Hunt, says the UK economy has dealt with the pandemic, the financial crisis, and the energy crisis caused by war in Europe. He acknowledged that interest rates “remain high as we bring down inflation” but added, ” We can now help families not just with the cost of living support but with permanent cuts in taxation.” He has described this year’s Spring Budget 2024 as a “budget for long-term growth.”
The entire Spring Budget 2024 is available on the government’s website.
The Key Announcements in the Spring Budget 2024
Tax and Income Support
- National Insurance will be cut by 2p in the pound for employees and the self-employed. This cut is estimated to be worth about £450 a year for someone on a £35,000 full-time salary.
- Plans for a £5,000 “British ISA” tax allowance announced for individual savers to invest in UK-listed companies.
- The Chancellor announced a consultation on child benefit rules to apply to collective household incomes rather than to individuals from April 2026. The income level at which a parent starts to lose child benefit entitlements will rise to £60,000, and the top of the taper will increase to £80,000.
- Rates paid to nurseries to fund free childcare hours for parents of children over nine months will continue for the next two years, allowing an extra 60,000 parents to enter the workforce in the next four years.
- Government funds for people struggling with the cost of living pressures will continue for another six months.
- Longer repayment period for people on benefits taking out emergency budgeting loans from the government.
- The non-domicile tax regime for UK residents whose permanent home is overseas will be replaced with new rules from April 2025. From April 2025, new arrivals to the UK will not have to pay tax on foreign income or capital gains for the first four years of their residency, but after that, they will pay the same tax as other UK residents.
Public debt, inflation and the economy
- The Office for Budget Responsibility predicts the UK economy will grow by 0.8% this year and 1.9% next year. Growth of 2% is expected for 2026, 1.8% in 2027, and 1.7% in 2028.
- Underlying debt (excluding Bank of England debt) is forecast to be 91.7% of GDP in the upcoming year, with a slight increase to 92.8% next year.
- Government spending will grow by 1% over the next five years.
Business and investment
- The VAT registration threshold will be increased from £85,000 to £90,000 from the start of April to help tens of thousands of businesses.
- AstraZeneca – the pharmaceutical company behind the Covid vaccine developed by Oxford University – plans to invest £650m in the UK to expand its footprint on the Cambridge Biomedical Campus and fund building a vaccine manufacturing hub in Speke in Liverpool.
- Tax reliefs for touring and orchestral productions, due to end in March 2025, have been made permanent.
- The Treasury will provide eligible film studios in England with 40% relief on their gross business rates until 2034.
- Independent films with a budget of less than £15m will receive a new tax credit.
- The government unveils plans to spend £26.4m on the National Theatre to upgrade its stages.
- The Chancellor has announced plans to allow full expensing to apply to leased assets, allowing businesses to offset investment in items such as new factory machinery and IT equipment against tax.
- Jeremy Hunt has allocated £120m for green industries to develop technologies, including carbon capture and storage projects and offshore wind farms.
- The government has confirmed plans to spend £160m on two nuclear sites owned by Hitachi – the Wylfa facility in Anglesey and the Oldbury site in South Gloucestershire. The government hopes to find a partner to develop a nuclear power station there.
- The Chancellor has announced he will extend windfall tax on the profits of North Sea oil and gas companies by a year, raising an expected £1.5bn. It was due to end in March 2028 but will not conclude in 2029.
- The government has announced plans to sell a chunk of shares in NatWest bank in the summer, which is expected to raise £3-4 bn. The bank, then called Royal Bank of Scotland, was bailed out during the financial crisis to help save the UK’s financial system from collapse.
- A “landmark public sector productivity plan” has been announced. It includes digitising hospital processes, improving the NHS app, and using AI to reduce doctor form filling.
Housing
- The government will reduce the higher property capital gains tax rate from 28% to 24%.
- The Chancellor confirms plans to scrap the furnished holiday lets regime.
- Jeremy Hunt also announced the abolishment of stamp duty relief for those buying more than one dwelling.
Transport and energy
- The Chancellor has announced a one-off adjustment to air passenger duty on non-economy flights.
- Fuel duty has been frozen for another year. The 5p cut in fuel duty on petrol and diesel was due to end later this month but has been extended.
Cigarettes, vapes and alcohol
- The freeze on alcohol duty (due to end in August) will continue until February 2025.
- A new tax on vaping products will be introduced following a consultation from October 2026.
- Existing tax on tobacco to increase.
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