Budget 2024: The Key Announcements

Chancellor Jeremy Hunt delivered the final Budget before the next general election yesterday. With almost all of the key measures being leaked before the event, there were few surprises in the list of announcements.

With the Conservative Party trailing in the polls, there was some expectation for a bold and innovative Budget to tackle some of the country’s biggest economic challenges. In reality, there were few significant changes but a number of smaller tweaks which are important to understand.

The key headline was a further 2p cut in National Insurance following a similar cut in the Autumn Statement last year. Despite these cuts, the overall tax burden continues to rise (although now a little less rapidly) and is now at the highest level since 1948. This is mainly caused by ‘fiscal drag’. With tax bands (such as those for Income Tax) held again, rising prices and wages mean many people are paying significantly more in tax than they were a few years ago.

Here is a summary of the key announcements:

Taxation

• National Insurance: Employee National insurance contributions to be reduced from 10% to 8% from April. Self-employed National Insurance rates will drop by the same amount.
• Stamp Duty: Stamp Duty relief for those who purchase more than one property in a single transaction (known as ‘Multiple Dwellings Relief’) is to be scrapped.
• Capital Gains Tax: Higher rate Capital Gains Tax on property to be reduced from 28% to 24%.
• Non-Dom Tax: So-called ‘Non-Dom tax status’ will be abolished. This had meant foreign nationals who live in the UK, but are officially domiciled overseas were previously able to avoid paying UK tax on their overseas income or capital gains.
• Air Passenger Duty: Non-economy class plane passengers will see their Air Passenger Duty increase.
• Energy Windfall Tax: The additional tax on the profits of energy companies will be extended from 2028 until 2029.
• Holiday Lets: Tax breaks for owners of furnished holiday lettings to be scrapped.
• Income Tax: No changes were announced in respect of Income Tax.
• Capital Gains Tax: No changes were announced in respect of Capital Gains Tax.

Pensions & Investments

• British ISA: A new ‘British ISA’ will allow an additional £5,000 tax-free annual investment into qualifying UK businesses. The full details of this are yet to be published.
• British Savings Bond: A new bond will be offered through NS&I offering a guaranteed rate, fixed for three years.
• Pensions: No changes we announced in respect of pensions including allowances, limits or tax reliefs.
• Investments: No further changes we announced in respect of investment products including allowances, limits or tax reliefs.

State Benefits

• High Income Child Benefit: The income threshold at which Child Benefit starts to be lost will be raised from £50,000 to £60,000 with those earning over £80,000 receiving no Child Benefit. A consultation was launched to make the means testing of this benefit at ‘household level’ as opposed to the current system based on individual earnings.
• Budgeting Loans: The repayment periods for people on low incomes who take out new budgeting loans will increase from one to two years.
• Cost of Living Support: The fund for people struggling with cost of living pressures to continue for a further six months.
• Debt Relief Orders: The £90 charge to get a debt relief order will be scrapped.

Economy

• Economic Growth: Updated UK GDP forecasts are for growth of 0.8% this year and 1.9% in 2025.
• Borrowing: Updated forecasts show government borrowing is projected to be 91.7% of GDP in the 2024/25 tax year and 92.8% of GDP the following year.
• Inflation: The Office for Budget Responsibility (OBR) projects inflation will come down to below the target level of 2% “within months”.
• Government Spending: Overall day-to-day government spending is set to grow by 1% in real terms over the next five years.

Business

• VAT: The VAT registration threshold for businesses will be increased from £85,000 to £90,000.
• Full Expensing: Businesses will be able to use ‘full expensing’ on leased assets in future “when affordable”.
• Creative Industries: Film studios in England will get 40% relief on their business rates until 2034. Tax relief of 45% for touring and orchestral productions and 40% for non-touring productions will be made permanent.

Duties

• Vapes: Vaping liquids will be subject to duty for the first time from October 2026. A one-off increase in tobacco duty will be made at the same time.
• Alcohol: A freeze on all alcohol duties was announced.
• Tobacco: Duty on tobacco to rise by £2 per 100 cigarettes.
• Fuel: No change to fuel duty.

If you would like to talk about any of the issues in this article or need more general help with your finances, please get in touch with us.

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