Last Wednesday, Jeremy Hunt unveiled his Budget. This budget was highly anticipated as it’s widely expected to be the final budget before the upcoming general election. However, there were no major surprises, as most of the key announcements had been widely expected.
In this blog, we have summarised the main elements of the Budget that are relevant to the majority of you. Please note that all changes are assumed to take place in April 2024 unless stated.
If you have any questions about how this will impact your personal circumstances, please get in touch.
National Insurance:
- The main rate of Employee National Insurance (Class 1) will be reduced from 10% to 8%. This had already been reduced from 12% to 10% in January 2024.
- The main rate of Self-Employed National Insurance (Class 4) will be reduced to 6%. While the Autumn Statement initially confirmed a reduction from 9% to 8% starting in April, the rate has now been further decreased.
Taxation:
- The higher rate of capital gains tax on residential property will be reduced from 28% to 24%.
- The threshold at which the child benefit tax charge is paid will increase from £50,000 to £60,000 with the upper threshold increasing from £60,000 to £80,000. A consultation is also underway to review whether it can be moved from an individual basis to a household basis.
- For those who currently opt out of receiving child benefit but wish to opt back in April, this can be done online by clicking on this link.
- The Furnished Holiday Lettings regime will be abolished from April 2025. These are special tax rules for rental income from properties that qualify as furnished holiday lettings.
- Stamp Duty Land Tax Relief for Multiple Dwellings will be abolished for transactions which complete on or after 1 June 2024. Please note that this currently only applies in England and Northern Ireland.
ISAs:
- A new British ISA is to be introduced which will allow an additional £5,000 to be invested in an ISA. This will have to be invested in UK assets and the new allowance will be in addition to the current £20,000 ISA allowance. Further details are expected following the conclusion of the consultation period in June. This is probably the most interesting news and we will confirm any updates we get about details when we can.
Business:
- The threshold at which small businesses must register for VAT will increase from £85,000 to £90,000.
Also, a final reminder that the end of the tax year is quickly approaching. For those who haven’t utilised their ISA allowance or looking to make further pension contributions for this tax year, the clock is ticking!
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