Last 6 March 2024, the chancellor announced the details of the latest Spring Budget. Here are how the Budget announcements could affect different aspects of individual taxpayers and businesses’ finances:
For Workers
Employee’s NI contributions will decrease by 2p, from 10% to 8% starting in April, following the 2p cut announced in the last Autumn statement. This means that the average worker earning £35,400 a year could see an increase of over £900 in their take-home pay this year.
Self-employed individuals who benefit from a 2p cut to Class 4 NI, brought down to 6%, will save around £650 compared to last year. These substantial NI cuts may not benefit those who are above state pension age, given that they do not pay NI.
For Investors
A new British ISA is being introduced, offering a tax-free allowance of £5,000 specifically for investing in UK stocks. This is in addition to the existing £20,000 annual ISA allowance.
Whilst this new ISA option aims to encourage investment in UK stocks, some argue it may add complexity and not offer significant advantages over existing ISAs.
For the Tech Sector
The government announced various measures to support technology and innovation, including increased funding for the NHS productivity plan, investments in tech clusters across the UK, and reforms to the R&D tax credit system to support SMEs.
These new initiatives aim to encourage investment in high-growth sectors like tech, provide funding for digital adoption and upskilling, and accelerate smart data schemes in energy and transport.
For Parents
Changes to the high-income child benefit charge (HICBC) will see the threshold rise to £60,000 from April, with full repayment now required only for incomes over £80,000 by April 2026. This could benefit around 485,000 families, with an average gain of £1,260.
For Landlords
The government plans to scrap the furnished holiday lettings regime from April 2025, potentially impacting landlords who rely on this for tax benefits. This move aims to address housing issues in popular holiday destinations but has faced criticism from landlords who fear financial losses.
For Homebuyers
Despite calls for stamp duty reform, no significant changes were announced. However, the Office for Budget Responsibility predicts a slight decrease in house prices followed by a rebound in 2026, with mortgage rates expected to rise.
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References
What the Spring Budget really means for your wallet. 6 March 2024. Retrieved from The Week: https://theweek.com/personal-finance/what-the-spring-budget-really-means-for-your-wallet
The Spring Budget 2024 – what was in it and what does it mean for the tech sector? 6 March 2024. Retrieved from Tech UK: https://www.techuk.org/resource/the-spring-budget-2024-what-was-in-it-and-what-does-it-mean-for-the-tech-sector.html
What does the Spring Budget 2024 mean for me? 6 March 2024. Retrieved from CAP: https://capuk.org/news-and-blog/what-does-the-spring-budget-2024-mean-for-me#
