Key Insights from the Spring Budget 2024

With the upcoming General Election, the Chancellor's announcements of giveaways and policy measures were aimed at winning favour with voters. As expected, with businesses lacking voting rights, less attention was given to business tax relief.

As we know locally, Inflation is heading in the right direction, which the Chancellor pointed out was 11% when first appointed, and this is now drastically down to 2%.

Here in Northern Ireland with the recent return of Stormont, a £100 million allocation was announced along with Coleraine identified as a Long-Term Plan investment pot.

Locally, we do know that the following announcements will impact:

Alcohol duty, previously frozen to 1 August 2024, will be extended to the 2024 festive season to 1 February 2025;
The Fuel Duty temporary cut of 5p was due to be lifted on 23 March 2024. This will remain a cut and be frozen for another year;
An additional 2% cut to National Insurance for both employees (10% to 8%) and those self-employed (8% to 6%) will be effective from April 2024. This along with the 2% cut in January 2024, results in 4% overall reduction in National Insurance Contributions;
There remains no movement on the personal allowances or income tax thresholds, which results in a technical tax rise due to the level of inflation. These rates are frozen until the 2027/28 tax year, being the personal allowance of £12,750, higher rate (40%) threshold of £50,270 and additional rate (45%) of £125,140;
The much anticipated reform to the Child benefit charge was announced and will undergo consultation to account for household income in 2026. However in the interim the threshold will be increased from £50k to £60k for the highest earner and the taper will be calculated over £20k (up to £80k for the highest earner) instead of £10k (up to £60K for the highest earner).
Full expensing to be extended to leased assets in due course, allowing more businesses to be entitled to the 100% capital investment relief and provide more flexibility for financing trading assets;
The VAT registration threshold will increase from £85k to £90k, allowing headroom for local businesses and the self-employed;
Capital Gains Tax on residential properties will reduce from 28% to 24% for higher rate taxpayers (with the 18% rate remaining in place for basic rate taxpayers), and should help free up more stock for the housing market;
The tax rules on Furnished Holiday Lettings will be abolished from April 2025, resulting in those with Air BnB’s paying more tax on the rental income due to more restrictions on finance costs and capital allowance relief;
For savers, a new ISA will be introduced to allow an additional £5K tax efficient saving, where the investments are in UK entities;
There was no movement on the Stamp Duty Land Tax thresholds, however multiple dwellings relief has now been abolished.

The largest change will be surrounding the abolition of the non-domiciled regime – which is always reported in the press – to ensure those moving to UK will pay more tax which is based on their residence. There is lots of detail surrounding this changes which will come into effect from April 2025, and that will impact many from this island, who have relocated from here to the South or vice versa.

If you have any questions, don't hesitate to contact our team.