The Chancellor of the Exchequer, Jeremy Hunt presented the Budget March 2024 in what is expected to be the final budget before the next UK General Election. The key points outlined include:
VAT
- The VAT registration threshold will be increased from £85,000 to £90,000 from the beginning of April 2024
National insurance
- National insurance Class 1 employee contribution rate will be cut from 10% to 8% of pay from April 2024 with savings of up to £450. This is in addition to the 2p cut in the autumn statement in November, which reduced the rate from 12% to 10% from January 2024.
- The Class 4 National Insurance contribution, which is paid by those who are self-employed, will be reduced by 3p from 9% to 6% from 6 April 2024. This supersedes the reduction to 8% announced in the Autumn Statement.
- The Chancellor had previously announced in the Autumn Statement that from April 2024, there will be no requirement to for those self-employed to pay National Insurance Class 2 contributions but those who pay voluntarily will be able to do so
Child benefit
- The threshold will be for a high-income tax charge on the benefit will be raised from £50,000 to £60,000. There will be a tapered charge between £60,000 and £80,000.
- The household support fund, introduced by the government in 2021 to help families struggling with the cost of living, has been extended by six months.
Non-domiciled tax status
- Non-domiciled tax status will be “abolished” and replaced by a “modern, simpler and fairer” residency based system from April 2025.
- Many people enjoy this status who live in the UK but who have certain overseas links – often determined by whether their father was born abroad. The status means they pay UK tax on money earned here, but not on their worldwide income.
- Under the new regime, after four years, those coming to the UK will pay the same tax as other UK residents. This means that they will pay UK tax on their foreign income and gains regardless of domicile status.
- Transitional arrangements:
- For those currently non-domiciled, they will be given the option to rebase their capital assets to 5 April 2019
- There will be a temporary 50% exemption for taxation on foreign income in the regime’s first year
- There will also be a two year Temporary Repatriation Facility for those who have paid tax on the remittance basis before 5 April 2025 to bring previously accrued foreign income and gains into the UK at a 12% rate of tax.
Property taxes
- There will be a reduction on the higher rate of property capital gains tax from 28% to 24%. The lower rate remains at 18%
- Stamp duty relief for those people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief, will be abolished
- The furnished holiday lets regime will be abolished. The initiative gives tax reliefs on short term holiday property rentals and makes these letting of these properties more profitable than to long-term tenants
Savings
- A new “British Isa”, will give investors an annual £5,000 extra tax-free allowance to “encourage more people to invest in UK assets” will be introduced.
