In his budget statement on Wednesday 6th March, the chancellor of the exchequer, Jeremy Hunt, announced a 2% cut to National Insurance and extended child benefit.
In a move called for by Labour, he also announced that the non-dom tax status will be abolished, saying that the Conservatives would use the extra revenue "to help cut taxes on working families" whereas Labour planned to use it to fund public services.
The OBR predicts that the economy will grow by 0.8% this year, and inflation is forecast to fall below 2% target by the end of June.
Key points
- National Insurance will be cut by 2p in the pound, to 8% for employees and to 6% for the self-employed.
- Non-dom tax regime for UK residents whose permanent home is overseas, to be replaced with new rules from April 2025.
- £5,000 UK ISA tax allowance for savers investing in "UK-focused" shares - to be set up following a consultation.
- Capital Gains Tax on Residential Property the higher rate of Capital Gains Tax which applies to the sale of residential property will be reduced from 28% to 24%.
- the Stamp Duty Land Tax relief available for those who purchase more than one property in a single transaction (multiple dwellings relief) will be abolished. This will apply for transactions with an effective date of 1 June 2024 onwards, with transitional rules if exchange took place on or before 6 March 2024.
- VAT Registration Threshold the turnover limit for compulsory VAT registration will be increased from £85,000 to £90,000 from April 2024.
- High Income Child Benefit Charge under current rules, if one parent earns more than £50,000 per annum, child benefit is reduced (down to £nil for those earning above £60,000). From April 2024, the lower limit will be increased to £60,000 and the upper limit to £80,000. In addition, a fairer household-based system will be introduced from April 2026, rather than simply looking at the highest earner.
- Freeze on alcohol duty, which had been due to end in August, to continue until February 2025.
- Tobacco/Vaping Duty a vaping duty linked to nicotine levels will be introduced in October 2026. Tobacco duty to go up £2.00 per 100 cigarettes at same time, to ensure vaping remains cheaper.
- Fuel Duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year.
- "Windfall" tax on the profits of energy firms, which had been scheduled to end in March 2028, extended until 2029.
- Office for Budget Responsibility predicts UK economy to grow by 0.8% this year and 1.9% next year.
- Growth of 2% predicted for 2026, with 1.8% in 2027 and 1.7% in 2028.
- UK's inflation rate forecast to fall below 2% target by the end of June, falling to 1.5% next year.
Perrys Accountants have a produced a comprehensive report which you can download from their website.
