Spring Budget 2024

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Chancellor Jeremy Hunt delivered his ‘Budget for Long Term Growth’ on Wednesday 6 March 2024. His speech promised ‘more investment, more jobs, better public services and lower taxes’.

Some of the key highlights include the following:

  • Further changes were made to National Insurance contributions (NICs), following the cuts made in the Autumn Statement 2023. The rates for NICs will be cut further for both employees and the self-employed from 6 April 2024.
  • There has also been a cut in the higher rate of Capital Gains Tax on residential property disposals and the creation of a new ISA allowance to encourage investment in promising UK businesses.
  • The threshold for VAT registration has been raised to £90,000 and announcing his intention to extend Full Expensing to leased assets.
  • The basic rate of tax is 20%. For 2024/25 the band of income taxable at this rate is £37,700 so that the threshold at which the 40% band applies is £50,270 for those who are entitled to the full personal allowance.
  • The income tax personal allowance is fixed at the current level until April 2028 at £12,570.
  • There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140.
  • Currently, the first £1,000 of dividends is chargeable to tax at 0% (the Dividend Allowance). This will be reduced to £500 for 2024/25.
  • Dividends received above the allowance are taxed at the following rates for 2024/25:
    • 8.75% for basic rate taxpayers
    • 33.75% for higher rate taxpayers
    • 39.35% for additional rate taxpayers
  • The self-employed generally have to pay two forms of NICs: Class 2 and Class 4. Firstly, the government will amend Class 2 self employed NICs from 6 April 2024.
  • Self-employed people with profits above £6,725 will continue to get access to contributory benefits, including the State Pension, through a National Insurance credit, without paying NICs.
  • Self employed people with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension will continue to be able to do so.

For more information please follow the link below:

 

Wettone Matthews budget summary March 2024