UK Government Unveils Spring Statement: Key Highlights
On March 6th, 2024, Chancellor Jeremy Hunt presented the Spring Statement to Parliament, outlining several significant initiatives poised to affect both individuals and businesses across the nation.
While the address covered a wide array of topics, we've compiled a summary of some of the standout announcements below:
Reduction in National Insurance Rates
Commencing April 6th, 2024, the main rate of National Insurance for employees will undergo a noteworthy reduction of 2 percentage points, from 10% to 8%. This move is anticipated to benefit the average employee by approximately £470 annually. Simultaneously, self-employed individuals will witness a reduction in National Insurance contributions from 8% to 6%, equating to savings of £650 per year for those earning £28,000 annually.
VAT Registration Threshold Increase
Effective April 1st, 2024, the minimum threshold for businesses necessitating VAT registration will climb from £85,000 to £90,000.
Business Tax Cuts and Funding Allocation
The Chancellor also announced forthcoming changes in business tax policies. Notably, full expensing will extend to leased assets, and the post-pandemic Recovery Loan Scheme will receive an additional £200 million in funding, aiding up to 11,000 small businesses. Renamed the Growth Guarantee Scheme, this initiative aims to facilitate access to crucial finance for budding enterprises.
Introduction of British ISA
Savers will soon have access to a new British ISA, permitting an additional annual tax-free investment of up to £5,000 in UK stocks, thus offering the dual benefit of supporting domestic businesses while potentially yielding superior returns compared to traditional savings accounts.
Capital Gains Tax Adjustment
In a move to stimulate property sales, the higher rate of Capital Gains Tax on residential property is set to decrease from 28% to 24%.
Child Benefit Entitlement Modification
Families are poised to benefit from revised child benefit entitlement criteria, with eligibility assessments transitioning from individual earnings to household income by April 2026. Furthermore, the threshold for higher-income child benefit charges will rise from £50,000 to £60,000 by April 6th, 2025, and will not be entirely withdrawn until individual earnings exceed £80,000.
Fuel Duty Freeze and Furnished Holiday Lettings Tax Changes
Fuel Duty will remain frozen for another year, alongside the continuation of the temporary 5 pence cut on fuel. Additionally, from April 6th, 2025, the Furnished Holiday Lettings tax regime will be abolished, ensuring parity in tax treatment between short-term and long-term lets.
Stamp Duty Relief and Investment Zones
Multiple Dwellings Relief for Stamp Duty will be abolished from June 1st, 2024. Furthermore, there was confirmation regarding previously announced details on Investment Zones, with an extension of the program in Scotland and Wales from 5 to 10 years, aligning with actions announced for England during the Autumn Statement.
Devolution and Levelling Up Fund
The Government has agreed upon a more extensive "trailblazer" devolution deal with the North East Mayoral Combined Authority, in addition to confirming the extension of Investment Zones to 10 years in Scotland and Wales, akin to measures undertaken in England.
As the UK Government ushers in these changes, we remain committed to supporting businesses throughout these transitions and in the future. For further details and updates, please refer to the official government resources.
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