UK SPRING BUDGET 2024 SHAPING TOMORROW

The OBR releases its five-year forecast for the UK economy and public finances. Furnished holiday lettings regime abolished but there are investment incentives and VAT threshold increases. Vote-winning announcements are always expected from a Chancellor’s Budget in an election year. Despite the stagnant economy and limited fiscal headroom, Jeremy Hunt still announced a few tax cuts and other surprises. With the UK entering a technical recession at the end of 2023 and a general election on the cards this year, Chancellor Jeremy Hunt was under pressure to deliver a Spring Budget that demonstrated fiscal responsibility and generosity. Dubbing the fiscal statement a ‘Budget for long-term growth”, Hunt focused his speech on delivering tax breaks, boosting investment and tackling unfairness in the UK tax system. Talk to ADPL about your business. 293 Green Lanes, London, N13 4XS. Tel:020 8886 9222
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One of the Chancellor’s most significant announcements was a 2p cut to National Insurance contributions (NICs) in April, on top of the 2p he already cut in last year’s Autumn Statement.

Workers will see their NIC rates fall by four percentage points in less than six months.

Other personal measures included extending the freeze and 5p cut on fuel duty for a further 12 months, cutting the higher capital gains tax (CGT) rate on residential property sales, and reforming the high income child benefit charge (HICBC) to increase the threshold and make the system fairer for single-earner households. For businesses, Hunt promised enhanced funding for ‘high-growth industries’ and focused support for the creative sector. The VAT threshold will also rise from £85,000 to £90,000 in April, reducing
the administrative burden for tens of thousands of businesses. To pay for these changes, the Chancellor announced several revenue-raising initiatives, such as replacing the current tax regime for non-domiciled individuals (non-doms), a new levy on vaping products and an extension of the windfall tax levy on oil and gas companies. Hunt also abolished the furnished holiday lettings relief, claiming this move would raise capital and improve the availability of long-term rental properties. This report outlines the major announcements in the Chancellor’s speech, breaking down the latest economic forecast from the Office for Budget Responsibility (OBR) and what the changes could mean for businesses and individuals alike.

SPRING BUDGET 2024  www.accountingdirectplus.com

 ECONOMIC OUTLOOK
 ECONOMY DOING BETTER THAN EXPECTED, SAYS OBR
The Chancellor’s ‘Budget for long-term growth’ recognises that the inflation battle is not yet over - as the OBR says that the economy is doing better than expected, but we are entering a period of stagnating output.In his Spring Budget speech, Jeremy Hunt said he had set out a plan to deliver long-term growth for the UK that will build a high-wage, high-skill economy with a path to more investment, more jobs, more productive public services and lower taxes.However, given the limited fiscal headroom shown through The Office of Budget Responsibility’s (OBR) economic report, the Chancellor’s plans for a pre-election Budget tax giveaway had to be somewhat reined in.
According to the OBR, the Chancellor had financial headroom of around £9bn (compared to £13bn in November), which the OBR said was “a tiny fraction of the risks around any forecast”.

REAL GDP
REAL HOUSEHOLD DISPOSABLE INCOME PER PERSON
THE BACKDROP OF RECESSION AND INFLATION
 LIVING STANDARDS BACK TO PRE-PANDEMIC LEVELS BY 2025
INFLATION RATE TO FALL MORE GRADUALLY IN 2024
CPI INFLATION
INTEREST RATES EXPECTED TO COME DOWN
PERSONAL CHANGES
HUNT SLASHES NICS AND REFORMS “UNFAIR” TAX POLICIES
NATIONAL INSURANCE CUT
NON-DOM ABOLISHMENT
CHILD BENEFITS
PERIOD CHILD BENEFIT RECEIVED
LOWER UPPER INCOME INCOME THRESHOLD THRESHOLD
BRITISH ISA INTRODUCTION

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The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. The information in this report is based upon our understanding of the Chancellor’s 2024 Spring Budget, in respect of which specific implementation details may change when the final legislation and supporting documentation are published.This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. Pension eligibility depends on individual circumstances.Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information.

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