What are the Tax Changes in the UK 2024 Budget?
On March 6, 2024, the Chancellor, Jeremy Hunt, delivered his last spring budget as the Chancellor of the United Kingdom. He presented this to The House of Commons to announce the government’s plans and taxation affecting individuals and businesses.
After much speculation about the last few days’ tax cuts and forthcoming election, reports suggested several actions to raise funds and raise duty on flying first class.
Another significant point under discussion was examining non-domiciled tax status, which the treasury has declined to comment on.
Do you want to know the fundamental tax changes in the UK 2024 budget? Read on to find the changes considered to be permanent cuts in taxation, with some taking effect from April 2024
Click on the headings below to jump to any section instantly.
- Income Tax
- National Insurance Participation
- VAT (Value Added Tax)
- Annual Invest Allowance
- Individual Saving Allowance
- Scheme for Loan Recovery
- Taxation On the Property
- Stamp Duty
- Capital Gains Tax
- Non-domiciled status
Income Tax
The government will consult on transitioning the high-income child benefit from the current system to one based on the individual’s highest earnings and the household’s earnings from April 2026
However, starting in April 2024, the current threshold at which the high-income child benefit charges apply has been modified from £50000 to £6000. The amount at which an individual loses all entitlement is currently £60000 and will be raised to £80000 from April 2026
National Insurance Participation
In the Autumn Statement on Wednesday, November 22, the Chancellor reduced the amount of Class 1 National Insurance for employees and directors from 12% to 10%. This was implemented on January 6, 2024. Also, in that statement, he promised to reduce class 4 NI for the self-employed from 9% to 8%.
In the spring budget, he announced that Class 1 NI for employees and directors would be reduced from 10% to 8%. However, Class 4 for the self-employed will be reduced from 8% to 6%. Both of these will be implemented in April 2024.
VAT (Value Added Tax)
From April 1, 2024, the limit at which the businesses are mandated to register for VAT will be increased from £85000 to £90000. The deregistration amount has also increased from £83000 to £88000. These modifications are the first in seven years.
Annual Invest Allowance
The full expensing described by the November Autumn Statement is being expended to apply leased assets when they become affordable. There are no specified dates for expansion.
Individual Saving Allowance
The introduction of the new British ISA with an annual allowance of £5000 in investment in the UK equity on top of existing ISA allowances.
Scheme for Loan Recovery
In 2021, during the pandemic year, the government designed a loan scheme. This scheme aimed to replace the Bounce Back Loan and Coronavirus Business Interruption Loan schemes and rebrand the Growth Guarantee Scheme. This will allow small businesses to access finance and manage their businesses accordingly.
Taxation On the Property
The furnished holiday letting scheme is being abolished.
Stamp Duty
Multiple Dwellings Relief is being abolished. This means relief for those purchasing more than one property in one transaction is revoked.
Capital Gains Tax
The capital gains tax rate paid for the disposal of properties is reduced from 28% to 24%.
Non-domiciled status
The non-domiciled status is being abolished and has transitioned to an oppressive structure. Starting on April 1st, 2025, in the UK, no tax will be implemented on new arrivals or foreign income and gains for the first four years. After four years, they will be taxed like any other UK taxpayer. However, there will be a transitional two-year arrangement for non-domiciled people to transfer to the new regime.