Budget March ’24
Personal Tax
National Insurance Contributions (NICs):
Starting April 6, 2024, the main rate of Class 1 employee NICs will decrease from 10% to 8%.
The main rate of Class 4 self-employed NICs will decrease by 2 pence, to 6%, from April 6, 2024. A consultation on the abolition of Class 2 NICs will follow later this year.
Tax Rules for Non-UK Domiciled Individuals:
The remittance basis of taxation was abolished for UK resident non-domiciled individuals on April 6, 2025, and replaced with a new 4-year foreign income and gains (FIG) regime.
High-Income Child Benefit Charge (HICBC):
The HICBC income threshold was raised from £50,000 to £60,000 starting April 6, 2024. Taper extended up to £80,000. Consultation for transitioning to a household income-based system by April 2026.
Capital Gains Tax (CGT):
The higher CGT rate for residential property disposals has been reduced from 28% to 24% for disposals on or after April 6, 2024.
Abolition of Furnished Holiday Lettings:
Current rules for Furnished Holiday Lettings (FHL) will be repealed for individuals and corporations starting April 2025.
UK Individual Savings Account (ISA):
New UK ISA with £5,000 allowance alongside existing ISA allowance. Consultation launched for design and implementation.
Improving Payment Options for Income Tax Self Assessment (ITSA):
HMRC’s digital services to support ITSA taxpayers seeking to pay tax in instalments will be improved and simplified.
Business Tax
Tax Reliefs:
New permanent rates of relief (40% and 45%) for theatre, orchestra, museums, and galleries. Additional support for independent film is available through the UK Independent Film Tax Credit. 5% increase in tax relief for UK visual effects costs in film and high-end TV.
R&D Tax Reliefs:
HMRC will establish an expert advisory panel to support the administration of R&D tax reliefs.
Excise and Duties
Value Added Tax (VAT):
The VAT threshold will increase to £90,000 (previously £85,000) from April 1, 2024. In April 2024, a consultation will be held on the VAT implications for the private hire vehicle sector.
Vaping Duty:
New duty on vaping products to be introduced in October 2026. Consultation on detailed design and implementation until May 29, 2024.
Stamp Duty Land Tax (SDLT):
First-time buyers’ Relief was extended to individuals using nominee and bare trust arrangements. Multiple-dwellings Relief was abolished.
Tackling the Tax Gap
Cryptoasset Reporting Framework (CARF): A consultation has been launched to implement the Cryptoasset Reporting Framework and Amendments to the Common Reporting Standard.
General Administration
The government will make additional tax administration and maintenance announcements on April 18, 2024. These announcements won’t require legislation in the Spring Finance Bill 2024 or affect the government’s finances.
Opinion
In a twist of political irony, the recent Budget, if delivered by a Labour chancellor, would have sent the Tories into a frenzy. Yet, under the guise of Tory stewardship, it’s a sombre acknowledgement of Britain’s leftward shift, with both major parties converging on economic ideology.
The Chancellor’s moves, notably the abolition of non-dom status, lack the foresight of genuine competitiveness and instead play into political manoeuvring, sacrificing long-term economic health.
Despite touted tax reductions, the burden continues to swell, hitting levels not seen since 1948, with negligible solutions for economic revitalization beyond superficial adjustments.
While lauded for his National Insurance Contributions (NIC) reduction, the Chancellor’s overall approach leans more towards redistributive policies, reminiscent of Labour’s playbook.
Promises of tax simplification ring hollow without a credible roadmap, leaving doubts about fiscal sustainability amidst demographic challenges and infrastructure woes.
The stark reality reveals little disparity between Tory and Labour’s economic strategies. Both are entangled in a bureaucratic quagmire that stifles growth and innovation.
As Britain hurtles towards economic and societal precipices, the Budget offers no course correction, merely perpetuating a trajectory towards stagnation and decline.
