On 6 March we saw the Chancellor, Jeremy Hunt, deliver the spring budget ahead of the general election.

The ‘Budget for Long Term Growth’ announced the economy is turning a corner with inflation expected to fall, lowering taxes, improving public services and seeing more investment in the UK.

Here is a summary of the main changes:

  • There will be a further reduction in Primary Class 1 (employee) National Insurance contributions from 10% to 8% from 6 April 2024. This comes in addition to the reduction in the Autumn Statement in November, which reduced the rate from 12% to 10%.
  • Class 4 National Insurance for the self employed will reduce from 8% to 6% from 6 April 2024. This is in addition to the previously announced reduction from 9% to 8% meaning that from 6 April 2024 the main rate will reduce from 9% to 6%.
  • The government will launch a consultation later this year to deliver its commitment to fully abolish Class 2 National Insurance. This follows the announcement in the Autumn Statement 2023 that from April 2024 no self-employed person will be required to pay Class 2, whilst those who pay voluntarily will continue to be able to do so to build entitlement to contributory benefits.
  • The Corporation Tax will remain at the main rate of 25% and the small profits rate of 19% for the financial year beginning 1 April 2025.
  • High Income Child Benefit Charge (HICBC) to be assessed on a collective household income basis rather than for individuals from April 2026. Whilst the consultation takes place, from April 2024, the threshold will increase from £50,000 to £60,000 and raising the level at which Child Benefit is fully repaid to £80,000.
  • The higher rate of Capital Gains Tax (CGT) on residential property will be cut from 28% to 24% from 6 April 2024. The lower rate will remain at 18%.
  • Stamp duty relief for those buying more than one dwelling, Multiple Dwelling Relief (MDR) will be abolished with effect from 1 June 2024.
  • The current tax regime for non-UK domiciled individuals will be abolished, this will be replaced by a simpler residence-based regime with effect from 6 April 2025. Under the new regime, anyone who has been tax resident in the UK for more than four years will pay UK tax on foreign income and gains, as is the case for other UK tax residents. The new regime will no longer rely on the remittance basis.
  • From 6 April 2025 the Furnished Holiday Lettings (FHL) tax regime will be abolished, meaning short-term and long-term lets will be treated the same for tax purposes. Individuals with FHL and non-FHL properties will no longer need to calculate and report income separately.
  • The government recognises that VAT can be a burden for some small businesses, and will therefore increase the VAT registration threshold from £85,000 to £90,000 from 1 April 2024. The deregistration threshold will be increased from £83,000 to £88,000.