Key Tax Changes in the 2024 Budget

The Chancellor, Jeremy Hunt, delivered what may be his last budget as Chancellor of the United Kingdom today, Wednesday 6 March 2024, with a raft of changes affecting individuals (employees, directors and self-employed) and businesses.

Some of the changes he deemed to be a permanent cut in taxation with some taking effect from April 2024.

Personal tax  

Income tax

The government will consult on transitioning the High Income Child Benefit charge from the current system based on the highest earnings of an individual in a household to earnings of the household from April 2026.

From April 2024 however, the current threshold at which the High Income Child Benefit charge applies is being changed from £50,000 to £60,000 and the amount at which an individual loses all entitlement is increasing to £80,000, from the current £60,000 threshold.

National insurance contribution

In his autumn statement on Wednesday 22 November 2023, the Chancellor reduced the Class 1 NI for employees & directors from 12% to 10% effective from 6 January 2024, while promising to reduce that of Class 4 NI for the self-employed from 9% to 8%, effective 6 April 2024.

Today, he has announced Class 1 NI for employees & directors will be reduced further from 10% to 8% and that of Class 4 for the self-employed will be reduced from 8% to 6%. Both of these measures will take effect from 6 April 2024.

Value Added Tax (VAT)

The threshold at which businesses are mandated to register for VAT is being increased from  £85,000 to £90,000 from 1 April. The deregistration threshold is also being increased from £83,000 to £88,000.  These will be the first changes in seven years.

Individual Savings Allowance (ISA)

Reform of the ISA system with the introduction of a new British ISA with a £5,000 annual allowance in investment in UK equity on top of existing ISA allowances.

Annual Invest Allowance

The full expensing introduced in the Autumn statement of November 2023 is being expanded to apply to leased assets when it becomes affordable. So there is no specified date on the expansion.

Recovery Loan Scheme

The loan scheme introduced by the government back in 2021 to replace Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme during the pandemic is being rebranded to the Growth Guarantee Scheme. This will allow small businesses to access finance

Property taxation

The furnished holiday letting regime is being abolished.

Stamp Duty

Relief for those purchasing more than one property in one transaction called “Multiple Dwellings Relief” is being abolished.

Capital gains tax

The rate at which the higher rate of capital gains tax is paid for the disposal of properties is reduced from the current rate of 28% to 24%.

Non domiciled status

This is being abolished and transitioned to a residency based regime. From April 2025, new arrivals will not pay any tax on foreign income and gains for their first four years in the UK. If in the UK after four years, then they will be taxed like any other UK tax payer.

There will be a transitional two year arrangement for those currently classed as non domiciled to transfer to the new regime.