Business

Budget 2024: The key announcements of Chancellor Jeremy Hunt’s speech

Published

2 months ago

on

The chancellor has unveiled the budget for 2024. Here are the key points:

• National insurance contributions for employees are being cut from 10% to 8% from April – impacting about 27 million workers – with savings of up to £450 a year.

• Self-employed NI rates will drop by two percentage points as well.

• Higher rate of property capital gains tax will be reduced from 28% to 24%.

• The non-dom tax status has been abolished. It means foreign nationals who live in the UK, but are officially domiciled overseas, will no longer be able to avoid paying UK tax on their overseas income or capital gains. A “simpler” residency-based system will arrive in 2025.

What’s a non-dom and why does it matter?

Removing the non-dom tax regime is a move straight from Labour’s playbook.

Potentially designed to take the wind out of Labour’s sails, it removes a clear dividing line between the parties’ policies.

A non-dom is someone who lives in the UK but whose permanent home is abroad.

The term is short for non-domiciled individual.

Under the UK’s current regime they only pay tax on money earned in the UK, their income and wealth from outside of the UK isn’t taxed.

As a result, rich people make considerable savings if they choose to be tax domiciled abroad.

Non-doms can benefit from the tax arrangement for up to 15 years.

But that will now change.

Labour wanted this to be cut just to four years. And that’s just what Chancellor Jeremy Hunt has done.

For those currently using the non-dom tax system “transitional arrangements” will be made, Mr Hunt said, including a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK.

This measure will attract an additional £15bn of foreign income and gains and generate more than £1bn of extra tax, he said.

• Stamp duty relief for people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief, is scrapped.

• The furnished holiday lettings regime has been abolished because it created “a distortion meaning that there are not enough properties available for long-term rental by local people”.

• Air passenger duty will be raised for non-economy class plane passengers.

• The energy profits levy – the windfall tax on UK-produced oil and gas – is extended to 2029.

Budget 2024: Live updates

• The High Income Child Benefit Charge, which hits payments if one parent earns above £50,000 a year, is to move to a household-based system. The threshold will rise to £60,000 from April in the meantime. The top of the taper where it is withdrawn is raised to £80,000.

• The household support fund is extended for a further six months.

• The £90 charge to get a debt relief order is abolished.

• Repayment periods for people on low incomes who take out new budgeting advance loans will increase from 12 to 24 months.

• A new British ISA will allow a £5,000 annual investment into in UK businesses. It includes all the tax advantages of other ISAs and will be on top of the existing allowances.

• To help people save, a new British Savings Bond, delivered through NSNI, will offer a guaranteed rate – fixed for three years.

Money blog: What budget means for you

• Duty will be introduced on vaping liquids for the first time in October 2026. A one-off increase in tobacco duty will be made at the same time.

• Alcohol duty freeze has been extended until February 2025. Mr Hunt said the government wants to back British pubs.

• No change to fuel duty, with 5p cut announced in March 2022 still in place.

• Full expensing for businesses will apply to leased assets in future “when affordable”. Draft bill to be published shortly.

• VAT registration threshold for businesses upped from £85,000 to £90,000

• Eligible film studios in England will secure 40% relief on their gross business rates until 2034. Tax relief made permanent at 45% for touring and orchestral productions and 40% for non-touring productions.

• Office for Budget Responsibility predicts UK GDP growth of 0.8% (0.7%) in 2024 and 1.9% (1.4%) in 2025. Figures in brackets are OBR’s predictions last November.

• Office for Budget Responsibility expects Treasury borrowing of 91.7% of GDP (91.6%) in 2024-25, 92.8% (92.7%) in 2025-26. Figures in brackets are OBR’s predictions last November.

• Office for Budget Responsibility sees inflation coming in below target within “months”.

• NHS to get additional £2.5bn this year to tackle issues including waiting lists.

• Planned growth in day-to-day public sector spending to be maintained at 1% in real terms, but Mr Hunt says “we are going to spend it better”. Includes funding NHS productivity plan “in full” to boost digital transformation.

Related Topics:

Trending

Exit mobile version