Here comes this year’s Spring Budget, and it’s likely to be full of surprises for those on both the left and right. With an election coming in 2024, the Conservatives have a lot of people to please to regain the confidence of voters following Liz Truss’ short tenure. Not to mention the many government scandals in recent years.
I’ll cover the policy announcements in as few words as possible, without getting into the weeds. The focus here is to let you know how today’s budget will affect you, not the economy as a whole.
You can read the full Spring Budget here.
You can recap on the Autumn Statement announcements here.
NOTE: This is breaking news and thus being regularly updated.
Wages, Benefits and Pensions
Universal Credit
- Increased repayment period for new “Budgeting Loan or Advance” from 12 months to 24 months.
- Removed Debt Relief Order charge of £90
- Household Support Fund extended for another six months at current levels.
Child Benefit
- Reform to child benefit, removing the unfairness currently in the system. High-income benefit charge will be replaced to a household based system from April 2026.
- In the meantime, from April 2024, the single-person threshold will be raised from £50,000 to £60,000.
Taxes & Allowances
National Insurance Contributions (Class 2 & 4)
- From 6th April 2024, Employee National Insurance Contributions for Basic Rate tax payers (i.e., those earning between £12,570 and £50,270) will decrease to 8%, from 10%.
- Self employed NI will be fall to 6%, from 8%.
- It’s worth noting that NI is not devolved, so this will benefit the whole of the UK.
- Long-term ambition is to remove National Insurance entirely.
ISA Allowances
- A British ISA will be introduced, allowing an additional £5,000 for investments in UK equity. This is on top of the existing ISA allowances, bringing the total to £25,000 per year.
VAT
- From April 2024, the VAT registration threshold will be increased from £85,000 to £90,000 per year.
Property
- Abolishing furnished holiday letting regime.
- Stamp Duty relief for those purchasing more than one property to be abolished.
- Capital Gains tax rate for property gains are to be reduced from 28% to 24%.
Non-Dom Status
- A new non-dom status to be introduced, with the current system abolished.
- Instead, a residency based system will be in place from April 2025.
- For the first four years of residency, new arrivals will not pay any tax on foreign income or gains. After this, they must pay UK taxes.
Public Spending
Public Services
- Focus on a “more productive state, not a bigger state”.
- Spending to increase by 1% in real terms, unchanged from previous announcements.
- Public Sector Productivity Plan announced.
- NHS: £3.4bn to renew NHS IT systems, digitising and utilising AI where appropriate, along with improving the NHS app to provide appointment alerts. All hospitals will transition to electronic patient records. Additional £2.5bn to help the NHS with day-to-day costs and to focus on reducing waiting times.
Alcohol Duty
- Extended alcohol duty freeze until February 2025. This was set to rise 3% this year.
Fuel Duty
- Extended Fuel Duty freeze until February 2025. This was set to rise 13% this year.
Vaping
- Introducing a duty on vaping from October 2026, pending a consultation, with a one-off duty increase in tobacco duty to counter a switch back to cigarettes.
Investment
- Full expensing to be extended to leased assets when appropriate.
- Various amounts of funding for swathes of local communities around the country, including £5m to renovate hundreds of village halls, as well as additional funding for home building.
- Additional funding for sustainable energy and R&D projects.
- Various tax benefits and funding for creative industries, particularly the film studio industry and VFX industry.
- Additional funding build 15 new SEN-focused free schools.
What Was Missing?
What was missing from this year’s Spring Budget? Here are a few things we had expected:
- Lifetime ISA penalty: We had previously expected this to be removed. Reportedly, Jeremy Hunt contacted Martin Lewis regarding this. He stated that he wanted to completely reform Lifetime ISAs, and so no changes were made this time.
- Personal Allowance and Income Tax Thresholds: Many were hoping for a removal of the freeze to the income tax rates.
What are your thoughts on this year’s Autumn Statement? Will you benefit from these changes? Was there anything you were hoping to see?
