Spring Statement 2024: What has been announced?

The Chancellor of the Exchequer has announced his Spring Statement in a rather raucous speech at the House of Commons stating:

‘At the beginning of 2023 the Prime Minister set out five priorities, three of which were economic; to halve inflation, grow the economy and get debt falling. At Spring Budget the government is delivering on these priorities; inflation has fallen, growth has been more resilient than expected and debt is forecast to fall.’

The OBR forecasts that inflation figures currently show 4% and falling below the 2% target in two months’ time.

Key points summary:

• From 6 April 2024 the main rate of National Insurance contributions for the self employed will be reduced from 8% to 6%, along with the abolition of Class 2 NICs announced at the Autumn Statement;
• Alcohol and fuel duties frozen again;
• The government will end the current tax regime for UK non doms;
• The higher rate of capital gains tax for residential property disposals will be cut from 28% to 24%. 

Cost of living measures:

• Extension of the Household Support Fund with an extra £500m. to help households with the cost of essentials like food and energy;
• Alcohol duty freeze - extension of the duty freeze further from August 2024 to 1 February 2025. Cutting costs for breweries, distilleries, restaurants, nightclubs, pubs & bars;
• Fuel duty freeze – extension of the temporary 5p cut in fuel duty rates for a further 12 months and planned inflation increase has been cancelled.

Business measures:

• Launching the growth guarantee scheme – extension of the Recovery Loan Scheme and renaming it as the Growth Guarantee Scheme;
• Increasing the VAT registration threshold - increasing the VAT registration threshold from £85,000 to £90,000 from 1 April;
• Growth package for investment zones in the north & midlands – The first Investment Zones in the north of England & the midlands will be launched in April, with a 10 year package of funding for local skills, R&D, local infrastructure & business investment;
• The British ISA will allow people to invest up to £5000 a year tax free – announcement of the British ISA;
• £26.4 million announced for the National Theatre;
• £1 billion for UK creative industries - more than £1bn in additional tax relief for creative industries over the next five years to boost inward investment and attract production companies from around the world;
• Astrazeneca plan to invest £650 million in the UK with a new vaccine manufacturing facility and extension of the current presence in Cambridge.

Public sector announcements:

• New plans for public sector productivity are expected to deliver up to £1.8 billion worth of benefits including reducing fraud and saving £100m and justice system police hours;
• A plan for £3.4 billion to boost NHS productivity to expand AI use for quicker cancer diagnosis, cutting admin & freeing up capacity and transforming access and services for patients.

Taxation

• Vaping products duty to be introduced from 1 October 2026; 
• One off adjustment to rates of Air Passenger Duty on non economy passengers. For those in economy on domestic or short haul flights, rates will remain frozen;
• The government will end the current tax regime for UK non doms. Under the new regime anyone who has been a tax resident in the UK for more than four years, will pay UK tax on their foreign income and gains;
• Abolition of Furnished Holiday Lettings tax regime – the abolition of the Furnished Holiday Lettings tax regime, eliminating the tax advantage for landlords who let short term furnished holiday properties over those who let residential properties to longer term tenants. 
• Stamp Duty Land Tax – the abolition of Multiple Dwellings Relief – From 1 June 2024, Multiple Dwellings Relief, a bulk purchase relief in the Stamp Duty Land Tax regime in England and Northern Ireland, will be abolished;
• Plans to base the High Income Child Benefit Charge on household income rather than individual earnings;
• Increasing the threshold at which parents start paying the High Income Child Benefit Charge, from £50,000 to £60,000;
• A change to capital gains tax to support the housing market. The higher rate of CGT for residential property disposals will be cut from 28% to 24%. 

To read the budget in full please follow the link below:

https://www.gov.uk/government/publications/spring-budget-2024/spring-budget-2024-html

If you have any questions or queries about how the Spring Statement might affect you or your business please get in touch with your Swindells partner w