Chancellor of the Exchequer, Jeremy Hunt, has unveiled his Spring statement today, outlining the government’s tax and spending plans for the year ahead. We wanted to provide you with a summary of the most notable points that were made in the speech.
Tax and Income Support
- National Insurance, a payroll tax, will see a 2p reduction in the pound for employees and the self-employed.
- A new £5,000 tax allowance, known as the “British ISA,” will enable individual savers to invest in UK-listed companies.
- Individuals on benefits taking out emergency budgeting loans from the government will benefit from a longer repayment period.
- The £90 fee to obtain a debt relief order will be scrapped.
- The government fund aimed at supporting individuals struggling with the cost of living will continue for another six months.
- The non-dom tax regime for UK residents with overseas permanent homes will be replaced with new rules starting from April 2025.
Housing
- The higher rate of tax paid on profits from selling properties will be reduced from 28% to 24%.
- Tax breaks for owners of holiday let properties will be discontinued.
Cigarettes, Vapes, and Alcohol
- The freeze on alcohol duty, which was set to end in August, will continue until February 2025.
- A new tax on vaping products will come into effect from October 2026 following a consultation.
- The tax on tobacco will increase, maintaining the “financial incentive to choose vaping over smoking.”
Transport and Energy
- Fuel duty will be frozen for another year, including the 5p cut in fuel duty on petrol and diesel, which was due to end this month.
- The UK government will purchase the site of the planned Wylfa nuclear site in north Wales in a £160m deal.
- The “windfall” tax on energy firms’ profits, initially expected to end in March 2028, has been extended until 2029.
- Air passenger duty, the tax paid on flights, will increase for business class tickets.
Public Debt, Inflation, and the Economy
- The Office for Budget Responsibility predicts that the UK economy will grow by 0.8% this year, and 1.9% next year.
- Growth rates of 2% in 2026, 1.8% in 2027, and 1.7% in 2028 are forecasted.
- The country’s inflation rate is expected to fall below the target of 2% in the coming months.
- The underlying debt, excluding Bank of England debt, is forecasted to be 91.7% of GDP this year, rising to 92.8% next year.
- Day-to-day government spending will see a 1% growth in real terms over the next five years.
Business and Investment
- The threshold at which small businesses need to register for VAT payments will increase from £85,000 to £90,000 starting in April.
- Tax reliefs for touring and orchestral productions, which were set to end in March 2025, will be made permanent.
Other Measures
- £1m has been allocated for a memorial to honour Muslims who fought for Britain during World War One and Two.
- A new tax credit will be introduced for independent UK films with a budget of less than £15m.
Source
BBC News (2024) Budget summary: Key points from Jeremy Hunt’s speech. Available at: https://www.bbc.co.uk/news/business-68359756 [Accessed 6 March 2024]
All the information in this article is correct as of the publish date 7th March 2024. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
