What the Spring Budget 2024 means for your money

Spring has sprung with the budget on the 6th March 2024. Here are the key announcements and how they might affect your finances:

The main headline grabber; a 2p cut to National Insurance.

For the employed, the main rate will reduce from 10% to 8% from April 2024. A 2p cut for the self-employed also comes into effect from April, with the main rate of Class 4 NICs for the self-employed reducing from 9% to 6%.

The income threshold at which Child Benefit is tapered will rise from £50,000 to £60,000. The rate of the charge is also halved, so Child Benefit is not repaid in full until earnings of £80,000 are reached.

At present, UK residents who are ‘domiciled’ abroad do not pay UK tax on overseas income or investment gains. This regime is due to be scrapped and replaced from April 2025. Under new rules, UK arrivals won’t pay any UK tax on foreign income or gains for the first four years of UK residency.

VAT registration threshold for businesses is to increase from £85,000 to £90,000.

Air passenger duty for first and business class flights will increase.

No notable changes here. Workplace pension providers will have to publish their performance data against rivals. Poorly performing schemes may be banned from taking on new business.

From 2027 workplace pension providers must also disclose how much of the scheme’s assets are invested in the UK.

The State Pension Tripe-lock (where State Pensions rise each year by the higher of earnings, RPI or 2.5%) is to be maintained.

The Furnished Holiday Lettings (FHL) tax regime is being abolished from 6 April 2025. This will remove some of the tax-breaks owners of FHL properties enjoy.

The higher rate of Capital Gains Tax for residential property disposals will be cut from 28% to 24%. As a reminder CGT only applies to second homes, not main residences.

Stamp Duty relief for people buying multiple properties in one transaction is being scrapped from 1 June 2024.

New UK ISA. The UK ISA will be a £5,000 allowance in addition to the existing £20,000 ISA allowance. Income and gains within the UK ISA will be tax-free but only investments in ‘UK-focussed assets’ are permitted.

NS&I will be launching British Savings Bonds which will offer a fixed rate of interest for 3 years.

Please note, the value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

This information is for general information only and does not constitute advice. The information is aimed at retail clients only.

Past performance is not necessarily a guide to future performance.