The 2024 budget explains what the government will do to change economic policy. Today, the Chancellor of the Exchequer laid out their policies.
Taxes
• National insurance contributions for employees are being cut from 10% to 8% from April - impacting about 27 million workers - with savings of up to £450 a year.
• Self-employed NI rates will drop by two percentage points as well.
• Higher rate of property capital gains tax will be reduced from 28% to 24%.
• The non-dom tax status has been abolished. It means foreign nationals who live in the UK, but are officially domiciled overseas, will no longer be able to avoid paying UK tax on their overseas income or capital gains. A “simpler” residency-based system will arrive in 2025.
• Stamp duty relief for people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief, is scrapped.
• The furnished holiday lettings regime has been abolished because it created “a distortion meaning that there are not enough properties available for long-term rental by local people”.
• Air passenger duty will be raised for non-economy class plane passengers.
• The energy profits levy - the windfall tax on UK-produced oil and gas - is extended to 2029.
Benefits
The High Income Child Benefit Charge, which hits payments if one parent earns above £50,000 a year, is to move to a household-based system. The threshold will rise to £60,000 from April in the meantime. The top of the taper where it is withdrawn is raised to £80,000.
• The household support fund is extended for a further six months.
• The £90 charge to get a debt relief order is abolished.
• Repayment periods for people on low incomes who take out new budgeting advance loans will increase from 12 to 24 months.
• A new British ISA will allow a £5,000 annual investment into in UK businesses. It includes all the tax advantages of other ISAs and will be on top of the existing allowances.
• To help people save, a new British Savings Bond, delivered through NSNI, will offer a guaranteed rate - fixed for three years.
Tobacco/Vaping
• Duty will be introduced on vaping liquids for the first time in October 2026. A one-off increase in tobacco duty will be made at the same time.
Alcohol and Fuel Duty
• No change to fuel duty , with 5p cut announced in March 2022 still in place.
• Alcohol duty freeze has been extended until February 2025. Mr Hunt said the government wants to back British pubs
Business Support
Full expensing for businesses will apply to leased assets in future “when affordable”. Draft bill to be published shortly.
• VAT registration threshold for businesses upped from £85,000 to £90,000
• Eligible film studios in England will secure 40% relief on their gross business rates until 2034. Tax relief made permanent at 45% for touring and orchestral productions and 40% for non-touring productions.
State of economy ?
• Office for Budget Responsibility predicts UK GDP growth of 0.8% (0.7%) in 2024 and 1.9% (1.4%) in 2025. Figures in brackets are OBR’s predictions last November.
• Office for Budget Responsibility expects Treasury borrowing of 91.7% of GDP (91.6%) in 2024-25, 92.8% (92.7%) in 2025-26. Figures in brackets are OBR’s predictions last November.
• Office for Budget Responsibility sees inflation coming in below target within “months”.