Spring Budget 2024: What You Need to Know

Several tax and policy changes were announced in the Spring budget of 2024 that will affect small businesses, self-employed people, and employers. Here is a brief summary of the key points.

Effective from 6 April 2024, national insurance rates are changing. The main rate of Class 1 employee NICs will be reduced from 10% to 8%. This is in addition to the 2p cut announced in the Autumn Statement 2023 which have been in place since 6 January 2024. The main rate of Class 4 NICs, paid by self-employed earners, will also be reduced from 9% to 6%.

Later this year, the government will launch a consultation to fully abolish Class 2 National Insurance. This follows the Autumn Statement 2023 announcement that from April 2024 no self-employed person will be required to pay Class 2, whilst those who pay voluntarily to build entitlement to contributory benefits will continue to be able to do so.

From 6 April 2024, the threshold for the High Income Child Benefit Charge (HICBC) will be raised from £50,000 to £60,000, and there will be a tapered charge between £60,000 and £80,000. The government will also consult on moving to a household-based system from April 2026, rather than one based on individual incomes.

Further reductions will take effect on the higher rate of Capital Gains Tax on residential properties. The rate will be reduced from 28% to 24%. For any gains that fall within an individual’s basic rate band, the lower rate will remain at 18%.

HMRC’s digital services will be improved and simplified to support Income Tax Self Assessment taxpayers who seek to pay tax in instalments. These changes will be implemented from September 2025.

Over £1 billion of new tax reliefs for the UK's creative industries have been announced, including a 40% relief from business rates for eligible film studios in England for the next 10 years. This will introduce the new UK Independent Film Tax Credit and an increase in the rate of tax credit by 5%, while removing the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit. A permanent extension will also be made to tax relief for theatres, museums, orchestras and galleries.

From 1 April 2024, the VAT registration threshold will be increased to £90,000 and the VAT deregistration threshold to £88,000.

Gas prices are forecast to remain high until at least 2028-29 according to HM Treasury, . The Energy Profits Levy (EPL) will therefore be extended for an additional year until March 2029. The legislation will also be implemented to ensure that the EPL will end when oil and gas prices fall below the levels set by the Energy Security Investment Mechanism if this is prior to March 2029.

There will be no changes to the rates of fuel duty at the current levels for a further 12 months. This is due to extending the temporary 5p cut and cancelling the planned increase in line with inflation for 2024-25.

The government will also maintain the difference between road fuel gas and diesel duty rates until 2032 as a result of a review.

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The information contained in this article is based on sources that we believe are reliable and should be understood as general information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such.