March Budget Summary - Tax Changes Announced
A summary of tax changes announced at the March Budget 2024. Further analysis for individuals, small business owners, and directors will follow as more details are released.
The Tory government maintains that despite the economic headwinds of a war in Europe and a pandemic in the last few years, the UK’s economy is one of the strongest compared to those in the G7, France, Germany and Italy, much to the chagrin and disagreement of the house as the Chancellor delivered this message. As a result, and despite recent confirmation that the UK is now in a recession, the Tory government is delivering the following tax cuts and changes to “power economic growth”.
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Business tax changes from April 2024
Full expensing will now include leased assets.
Hunt extending the Recovery Loan Scheme and renaming it as the Growth Guarantee Scheme, which he said would help 11,000 SMEs to access funding.
The VAT threshold will increase from £85K to £90K from 1st April 2024. The VAT threshold had been frozen to April 2026.
National Insurance Contributions Cut from April 2024
A further cut of 2% from April 2024 to the Employees National Insurance Contributions to 8%, down from its original 12% four months ago. This equated to £450 saving per year for workers.
For the self-employed, it will be cut from 8% to 6% . This equated to £450 saving per year.
Overall, workers will save £900 per year as a result of both NICs tax cuts announced in Autumn Statement and the March budget.
Overall, self employed people will save £650 per year as a result of both NICs tax cuts announced in Autumn Statement and the March budget.
However, the personal allowance and higher rate thresholds remain frozen at £12,570 and £50,270. If they had risen with inflation, they would now exceed £15,000 and £60,000 respectively. Therefore, the NICs cuts may not equate to feeling much better off, however Hunt pledged that the Tory government will continue to cut NICs if they remain in power to “unleash people power”, declaring NICs as an unfair form of double taxation.
Property & Capital tax changes
The Furnished Holiday Let tax regime is being abolished. The chancellor says he will scrap tax breaks which make it more profitable for second home owners to let out their properties to holiday makers rather than to long-term tenants to rent. This is a big change for property investors who will see their profit margins hit.
Multiple dwelling relief is being abolished.
Reducing the higher rate of CGT on property sales from 28 to 24%
Non-domiciled status -R.I.P. the remittance basis
The Chancellor is looking to encourage wealthy people to bring their foreign held assets and money into the U.K. and has made an announcement abolishing the existing ‘nom-dom’ rules.
The Chancellor has said he would like to modernise and simplify the nom-dom system.
There will be no UK tax levied on foreign income and gains for first 4 years of residency in the UK, then after 4 years if you continue to live in the UK, you will pay the same tax as other UK residents.
There will be a 2-year period of transitional arrangements for those benefiting from the current non-dom regime.
High Income Child Benefit Charge (HICBIC) reform from April 2024
Moving HICBIC to a household based system by April 2026 versus looking at income as individuals in a household.
From April 2024, the HICBIC threshold will be raised from £50,000 to £60,000. Hunt said this will take 170,000 families out of the regime.
Economic forecast for the UK & Support for the poorest to help with cost of living crisis
Inflation is currently at 4% and is forecast to drop to 2% in a few months, according to the Office of Budget Responsibility (OBR).
Hunt’s focus is on debt for the poorest. The current cost of living crisis loan repayment period will increase from 12 months to 24 months.
He announced a further six months of continued cost-of-living crisis payments to the poorest families as inflation remains high.
Other highlights
Focus on modernising the tech capabilities of public services, such as the NHS and the police. No new funding to the NHS, but ‘using the current budget better’.
Allow pension funds to invest in high quality domestic businesses, including the growing tech and AI industries, with the UK expected to become the next Silicon Valley by 2025, based on growth of domestic tech led businesses
Increase in funding for creative and film industries, the Chancellor touting that the UK is expected to be only behind Hollywood in film production by 2025
Increase funding to HMRC to chase unpaid tax debts
There will be a new levy on vaping starting in October 2026. There will also be a one-off increase in tobacco duty.
There will be a new ‘British ISA’ increasing the tax free allowance by £5K per tax year with a focus on investing in UK businesses.
