In the 2024 Spring Budget unveiled by Chancellor Jeremy Hunt on March 6th, the government outlined its ‘Budget for Long-Term Growth’ strategy. This plan includes a wide range of initiatives designed to stimulate investment, increase employment, enhance public services, and reduce taxes. Key updates in taxation, pensions, and investments were announced, strategically positioned to promote economic development and cater to the diverse needs of the UK economy.
National Insurance
A significant aspect of the budget is the reduction in National Insurance Contribution (NIC) rates, which stands to benefit both employees and the self-employed. Effective from April 6th, 2024, the rate for Class 1 employee NICs will decrease by 2p, moving from 10% to 8%, adding to a previously announced cut. In a similar vein, the rate for Class 4 NICs for self-employed individuals will reduce from 9% to 6%. The government also plans to eliminate Class 2 National Insurance, pending a detailed consultation.
Non-Doms
For those researching changes in taxation for non-domiciled residents, the Spring Budget heralds a major reform. Starting April 6th, 2025, the UK will adopt a residence-based taxation system, significantly altering the landscape for taxing foreign income and gains. This aims to simplify the tax regime, making it fairer and potentially influencing residency and investment decisions in the UK.
Property
Property taxation also sees changes, with the abolition of Multiple Dwellings Relief from June 1st, 2024, due to its failure to meet its policy objectives. Additionally, the Spring Budget reduces the higher rate of Capital Gains Tax on residential properties from 28% to 24% starting April 6th, 2024, likely affecting decisions around property investments and sales.
Savings
New savings and investment opportunities are introduced in the Spring Budget 2024, with the launch of a new UK ISA and British Savings Bonds. These measures aim to encourage investment in UK assets and provide more saving options for residents, highlighting the government’s commitment to fostering economic growth.
Childcare
Childcare receives a boost too, with the government announcing an increase in the hourly rate for childcare providers. This move is set to enhance the “free” childcare hours offer for children aged nine months to four years, improving both the affordability and accessibility of childcare services for families searching for Spring Budget updates on childcare provisions.
For our full Spring Budget report please click here.