Breaking down the Spring Budget 2024 - What was announced?

Posted: 06 / 03 / 2024

In his last budget before the general election, the Chancellor was under huge pressure to announce some significant tax cuts to boost his party’s fortunes, without scaring the markets and damaging signs of a recovery.

Below, we have set out some of the key points.

Personal taxes

The main rate of employee National insurance contributions will reduce by 2p from 10% to 8% from 6 April 2024. The table below shows the annual savings as a result of this measure:

Salary	Annual Saving by cutting NIC rate to 8%
£25k	£249
£35k	£449
£50k	£749
£100k	£754
£150k	£754

The main rate of self-employed National Insurance will also reduce by 2p to 6% from 6 April 2024.
The current tax system for non-domiciled individuals will be abolished and will be replaced from April 2025 with a new “fairer residence based” regime. The new regime would allow new arrivals to the UK not to pay tax on foreign income and gains for the first four years of their UK residency, following which they will pay UK tax on their foreign income and gains in line with other UK residents.
The government announced the intention to move to a residence-based regime for IHT and will consult in due course (no changes to IHT will take effect before 6 April 2025).
No changes to previously announced rates and threshold for income tax;
- Higher rate threshold still £50,270
- Additional rate threshold still £125,140
- Dividend allowance still reducing to £500

Indirect taxes

Alcohol duty will be frozen until 1 February 2025.
Fuel duty will be frozen for a further 12 months to March 2025.
The VAT registration threshold will increase from £85,000 to £90,000 from 1^st April 2024 .
A new vape duty will be introduced from October 2026 along with a one-off increase in tobacco duty.
A one-off adjustment will be made to rates of Air Passenger Duty (APD) on non-economy passengers.

Property taxes

The Furnished Holiday Letting (“FHL”) tax regime will be abolished from 6 April 2025.
SDLT Multiple Dwellings Relief will be abolished from 1 June 2024.
The higher rate of Capital Gains Tax on residential property gains will decrease from 28% to 24%. The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band. The CGT annual exemption is still dropping to £3k from April.

Direct taxes

Full expensing will be extended to apply to leased assets when fiscal conditions allow – draft legislation to published shortly.

Creative Tax Industry reliefs

A 5% increase in tax relief for UK visual effects costs in film and high-end TV, under the Audio-Visual Expenditure Credit (“AVEC”). UK visual effects costs will be exempt from the AVEC’s 80% cap on qualifying expenditure.
A 40% relief on the gross business rates until 2034 for film studies in England.
A new tax credit (Independent Film Tax Credit “IFTC”) was introduced for independent films with budgets of less than £15m at a rate of 53% of qualifying expenditure.
A permanent extension will be made to higher rates of tax relief for theatres, orchestras, museums and galleries. From 1 April 2025 these rates will be permanently set at 45%/40% for touring/non-touring productions.

Other

The Recovery Loan Scheme will be extended to support SMEs to access the finance they need and renaming it as the “Growth Guarantee Scheme”
A brand new “British ISA” was unveiled which will allow an additional £5,000 of annual tax free investment in UK equities (this is on top of existing ISA allowances).
The High Income Child Benefit charge threshold will be increased from £50,000 to £60,000 from April 2024, with the top of the taper increasing to £80,000. From April 2026, the High Income thresholds will be based on household income rather than individual incomes.
The Energy Profits Levy (EPL) has been extended by an additional year until March 2029
No changes to main corporation tax rates (still 25%)