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2024 Spring Budget

March 8, 2024

Navigating the Fiscal Landscape: A Closer Look at the UK Government’s Budget 2024

As we step into the fiscal realm of 2024, the UK government’s budget announcements have stirred
both intrigue and anticipation. With a slew of measures aimed at alleviating the tax burden on
individuals and bolstering investment, the budget unveils a strategic roadmap for economic
prosperity. Let’s delve into the key highlights that are set to reshape the financial landscape for
millions across the nation.

Tax Relief for Workers and the Self-Employed

One of the most significant announcements pertains to the reduction in National Insurance rates for
both employees and the self-employed. Effective from April 6, 2024, the main rate of employee
National Insurance will witness a substantial cut of 2p, plummeting from 10% to 8%. This move is
poised to put more money back into the pockets of the average worker, with savings amounting to
over £900 annually for those earning £35,400.

Moreover, the government is extending its support to the self-employed by slashing the main rate of
Class 4 National Insurance Contributions (NICs) from 9% to 6%. Combined with the elimination of
the requirement to pay Class 2 NICs, self-employed individuals stand to benefit significantly, with
savings averaging £650 per year for those with incomes around £28,000.

Empowering Families Through Tax Reform

In a bid to alleviate the financial strain on families, the government is implementing measures to
revise the High Income Child Benefit Charge. By raising the threshold to £60,000 and halving the
charge rate, approximately 170,000 families will be exempt from this tax burden. It is estimated that
nearly half a million families will enjoy an average annual gain of £1,260, providing much-needed
relief to household budgets.

Revamping the Property Tax System

Recognizing the need for a fairer and more efficient property tax regime, the government has
unveiled a series of reforms. These include abolishing the Furnished Holiday Lettings tax regime to
level the playing field between short-term and long-term lets, reducing Capital Gains Tax on
residential properties from 28% to 24%, the 18% rates remain the same, and abolishing Multiple
Dwellings Relief to curb incorrect and foul claims. These measures are poised to stimulate the
housing market and promote local living.

Supporting Small and Medium-sized Enterprises (SMEs)

Acknowledging the pivotal role played by SMEs in driving economic growth, the government is
taking proactive steps to support their endeavors. By increasing the VAT registration threshold from
£85,000 to £90,000, SMEs will benefit from reduced tax burdens, fostering an environment
conducive to expansion and innovation.

Investment in Digital Services and Savings Opportunities

In line with its commitment to modernize tax administration, the government is investing in HMRC
digital services to streamline processes for Income Tax Self-Assessment customers. Moreover, to
encourage savings and investment in the UK, the government is introducing a new UK ISA and
British Savings Bonds. The UK ISA, with a £5,000 allowance and a guaranteed interest rate fixed for
three years, will offer tax-free opportunities for individuals to invest in UK-focused assets, thus
promoting financial security and fostering domestic investment.

Conclusion

As we navigate the complex terrain of fiscal policy, the UK government’s budget for 2024 sets a clear
trajectory towards economic resilience and prosperity. By prioritising tax relief, supporting families,
revamping the property tax system, empowering SMEs, and encouraging savings and investment,
the government aims to build a stronger, more inclusive economy for all. As these measures unfold,
they hold the promise of ushering in a new era of financial stability and growth for the nation.