UK Spring Budget 2024 Summary
Following the recent Spring Budget, please find below a summary of some key points:
Cuts to National Insurance Contributions (NICs)
Class 1 National Insurance contributions will be cut from 10% to 8% from 6th April 2024.
NICs are paid by employees and the self-employed on their earnings, as well as employers. Currently, employees pay NI at 10% on earnings over £12,570 and at 2% on earnings over £50,268. Today’s announcement will see the 10% lowered to 8%.
This will result in anyone earning above £50,268 saving up to £754 in NICs each year.
Introduction of a UK ISA
A Tax-Free £5,000 UK ISA to be used to invest in qualifying UK investments.
This will encourage investment into the UK and also provide potential growth without deduction of tax on income and gains.
An extra £5,000 additional ISA allowance will be available.
British Savings Bonds
A new NS&I product will be launched in April 2024 with a guaranteed rate of interest fixed for 3 years.
These products can offer lower risk returns with a yet to be determined interest rate – which will be the main driver behind the appeal.
Capital Gains Tax on Residential Property (CGT)
From 6th April 2024, the higher rate of CGT for residential property disposals will be cut from 28% to 24%.
This may encourage landlords and second homeowners to sell their properties to increase housing availability. If you are considering selling a second home, deferring this until after 6th April could save 4% on taxable gains.
However the capital gains allowance is also reducing after 6th April 2024 from £6,000 to £3,000 which offsets some of this saving.
Furnished Holiday Lettings Regime
From 6th April 2025, the various tax benefits of furnished holiday lets will be abolished.
This may result in properties becoming less profitable investments going forward.
Cryptocurrency
The government is launching a consultation on crypto-asset reporting.
This will help with the lack of transparency of cryptocurrency investors for tax purposes as institutions will share information directly to the tax office.
Child Benefit Threshold Raised
From April 2024 the £50,000 – £60,000 high-income child benefit charge threshold will be raised to £60,000 – £80,000.
The government later plans to extend this charge so that the child benefit charge will apply on a household income basis by April 2026.
It will be crucial going forward to consider pension contribution planning for both partners as this can reduce the overall household income and maximise child benefits.
Stamp Duty
From 1st June 2024 the government is abolishing multiple dwellings relief for stamp duty.
There is a very limited window between now and 1st June 2024 for the completion of property purchases before the removal of this multiple dwellings relief.
The full Spring Budget 2024 Report can be found here: https://www.gov.uk/government/publications/spring-budget-2024
If you are unsure how these announcements will affect you, or if you have any questions, please get in touch with us.
