The Spring Statement 2024

  • 5 min read
  • 6 Mar 2024
Spring statement 2024 TaxScouts

Rumours about the changes and the general election were swirling ahead of the Spring Statement this year, but now we’ve heard it – straight from the Jez Hunt’s mouth! 

The Spring Statement is an annual announcement made by the Chancellor of Exchequer regarding the financial health and future plans of the economy. The current Chancellor – and there have been a few in the last two years – is Jeremy Hunt.

He also announced tax changes in the November 2023 Autumn Budget, most of which come into effect soon, from 6th April 2024.

In an attempt to make some changes before the general election that will need to be held on or before 28th January 2025, Hunt had lots to say. Read on to see what’s changed and how it affects you.

The changes at a glance

Here’s a quick overview of the cuts, freezes and more from the 2024 Spring Statement:

  • National Insurance goes down by 2% for employees and self-employed
  • Increase in the High Income Child Benefit threshold 
  • CGT on property cut from 28% to 24% for higher rate taxpayers
  • The British ISA – savings for investing in blighty
  • New rules for future short-term holiday let owners 
  • VAT threshold to go up to £90,000
  • Non-dom status reform
  • Stamp Duty relief abolished for investors

National Insurance goes down (again)

For what feels like the 10 millionth time, National Insurance rates are changing. This time, they’re going down. 

Jeremy Hunt ended today’s statement with the rousing 2% cut to both Class 1 National Insurance which is paid by employees, and to Class 4 National Insurance which is paid by the self-employed. This makes the new rates as follows from 6th April 2024:

  • Class 1 National Insurance – 8% if you earn over £12,570
  • Class 4 National Insurance – 6% if you earn over £12,570

High Income Child Benefit Charge threshold goes up

The Child Benefit is a tax-free payment available for parents or anyone responsible for bringing up a child.

But there’s a catch (of course). If you or your partner earn over £50,000 a year, you will need to pay some or even all of it back. 

Currently, if you receive Child Benefit, the High Income Child Benefit Charge (HICBC) increases gradually for incomes between £50,000 and £60,000.

Now, the threshold is going up from £50,000 – £60,000 to £60,000 to £80,000, which means you won’t lose or have to pay back any Child Benefit until you or your partner are earning an income of over £60,000. Hooray!

CGT on property goes down (for higher rate payers) 

From 6th April 2024, as you may know, the thresholds for Capital Gains Tax and Dividend Tax are halving to £3,000 and £500 respectively. This change was announced in the 2022 budget. 

But Hunt had another trick up his sleeve for property investors. The CGT rate on property for higher rate payers (which is anyone earning more than £50,270) is being cut from 28% to 24%. 

Sadly not for basic rate payers who will continue to pay CGT on property at a rate of 18%. 

The change will come into effect from April 2024.

The great “British ISA”

Details to follow – but what we know so far is that Hunt will be rewarding savers for using their ISAs to invest in UK business. The new ISA will go by the tune of the British ISA, and it will be a stocks and shares ISA. It promises to give savers a further £5,000 in annual tax-free investment when it goes on UK equities. 

We’ll keep our eyes peeled for more! 

Furnished Holiday Lets crackdown

Property investors, we know what you’re thinking. FHL. 

Hunt announced that he will be scrapping the tax breaks for those who let out their second homes as short-term holiday lets. 

There are favourable tax circumstances for those who let out Furnished Holiday Lets (FHLs) rather than renting out their property for a tenancy, because HMRC doesn’t view FHLs as a property business. They’re viewed as a trade like that of a hotel.  

Those who let out their property for more than 90 days will now have to seek planning permission from their respective councils to operate. Plus, they’ll have to sign up to a new national register. These changes make it harder for people to convert their properties into holiday lets and price out locals from the property market. 

Take a look at the existing rule and tax breaks for furnished holiday lets

VAT threshold goes up

Sole traders, listen up! 

The VAT threshold is going up from £85,000 to £90,000 from 6th April 2024, so it takes effect for the 2024/25 tax year.

It means that you won’t pay VAT on your sole trader business until your annual turnover is more than £90,000. 

Non-dom no longer

OK, not exactly. But it’s the end of the non-domiciled status which enables those who are living in the UK but not-domiciled here (which is a somewhat grey area distinction) to be exempt from paying UK tax on their non-UK income.

Starting in 2025, wealthy foreign residents who come to live in the UK won’t pay tax on their foreign income for the first four years of residence – but once those four years are up, those still living in the UK will be treated as a resident for tax purposes. 

Lest we forget 2022 when Akshata Murty (a.k.a our Prime Minister Rishi Sunak’s wife) had to give up her non-dom status after suggestions it was enabling her not to pay tax on her very (very) significant non-UK income. 

A big move indeed from Mr Jez Hunt. 

So long stamp duty relief

…for investors buying more than one property at once. 

In an attempt to crack down on property investors abusing reliefs, Hunt is abolishing the Multiple Dwellings Relief. 

The MDR ensures a buyer won’t pay stamp duty at a higher rate when they buy multiple properties in a single transaction vs if they were to buy the properties separately. 

It applies to both residential and non-residential property purchases, which means the tax savings could be fairly significant. 

More changes from 6th April 2024

The new tax year starts on 6th April, so here are a few other things that are changing:

  • CGT threshold halved to £3,000
  • Dividend tax threshold halved to £1,000
  • Class 2 National Insurance is being scrapped
  • Child Benefit payments are going up to £25.60 for your first child and £16.95 for each child that follows (per week)
  • The National Living Wage (NLW) will rise to £11.44 per hour
  • From 2024/25, high earners (£150,000+) will no longer have to file a Self Assessment tax return if you’re a PAYE employee and don’t have any other income or reason to file

Spring has sprung!

That’s all folks. Lots of changes are coming your way in the new tax year and beyond. Stick with us and we’ll keep you updated throughout all the hooks and jabs the government throws our way!

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