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What was announced in the Budget 2024?
04 Jun 2024
In what is likely (but not guaranteed) to be his last Budget before the general election, the Chancellor focused on his growth plan to raise living standards for families and businesses, stating that cutting taxes will boost long-term growth.
In a speech that lasted just over an hour, a plethora of announcements were made, most that we were expecting but some that we were not. The headline tax cuts that will benefit small and medium-sized enterprises were.
Business cuts
VAT – The threshold at which businesses will need to charge VAT on their supplies will increase to £90,000 from 1 April 2024, the first increase in the VAT threshold for seven years. This will be a welcome increase to small businesses.
Capital allowances – The first-year capital allowances relief known as ‘full expensing’ was made permanent in the 2023 Autumn Statement. Whilst this was a welcome announcement for businesses investing in capital assets, there was a restriction for businesses that then leased those assets to customers. Today, the Chancellor announced that full expensing will also apply to leased assets. Unfortunately, the relief still only applies to companies.
Cultural reliefs – Theatres, orchestras, museums & galleries lost out significantly during the pandemic, which lead the Government to temporarily increase the rates of tax relief for these businesses. These rates were due to end in March 2025 but it was confirmed these rates will be made permanent.
Fuel duty – The fuel duty freeze will be extended for a further 12 months.
Non-business Tax cuts
National insurance – As we expected, there was a further cut to the rate of national insurance for workers. Employee NIC will be cut to 8% from April 2024, with the self-employed rate being cut to 6%. Unfortunately, it appears that the cut will follow that made in the 2023 Autumn Statement and will not apply to the employer rate of NIC, which remains at 13.8%, meaning businesses will not see any benefit.
Child benefit charge – This is a divisive and not well-known charge for working parents, so it is welcome news that the rate at which the charge applies is increasing to £60,000 from April 2024. The Chancellor also took the opportunity to announce a reform to the charge from April 2026, where the charge will be based on household income.
Capital gains tax – in an announcement that we weren’t expecting, the highest rate on residential property CGT is being cut to 24% from April 2024.
Tax increases from the Budget Announcements 2024
The Chancellor was keen to demonstrate that the giveaways were funded without increasing borrowing and without reducing spending but due to tax cuts.
Non-dom status – It was widely rumoured that the favourable so-called ‘non-dom’ tax regime may be abolished, and the Chancellor didn’t disappoint. UK residents will no longer have the option to not pay tax on their non-UK income and gains. Instead, the non-dom regime will be replaced with a residency-based system. A two-year transitional period will apply.
Holiday lets – Another tax relief abolished (from April 2025) was the favourable tax treatment for people who let out holiday accommodation. The Chancellor announced it was being made to make it easier for local people to access property for longer-term renting.
Stamp duty – Following suit was the announcement that stamp duty multiple dwellings relief will also be abolished, putting an end to the tax saving obtained when buying a house that has an annex included.
Vaping duty – From October 2026, excise duty will be applied to vaping products to discourage childing from taking it up. To not discriminate, there will be a one-off increase in tobacco duty.
Overall, whilst there was a number of announcements made, there were not many for businesses to get excited about. This was a Budget for the general election!
If you would like to discuss how WR Partners can support you and your business following the new changes in the Spring Budget, contact us today!
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