Spring Budget March 2024

 

The Chancellor's recent Spring Budget outlined a series of tax and spending measures that will directly impact small businesses and landlords in the UK. Here at BSB Accountancy and Bookkeeping, we've dissected the details to bring you the most relevant information. 

 

 

This budget delivers a significant boost for businesses and self-employed individuals through reduced National Insurance (NI) contributions. The main rate of Class 4 NI for self-employed individuals falls to 6% from April 2024. This builds upon the 1% cut announced in the Autumn Statement, resulting in an estimated annual saving of £650 for a self-employed person earning £28,000. Additionally, the Class 1 employee NI contributions main rate will also be cut by 2%, bringing it down from 10% to 8% from April. 

 

Good news for businesses! The VAT registration threshold is rising from £85,000 to £90,000, effective from April 1st, 2024. This means businesses with annual VATable sales below this threshold won't be required to register for VAT. The de-registration threshold is also being raised to £88,000, offering flexibility for businesses whose VATable sales fluctuate. 

 

The Spring Budget offers some relief for property owners. The higher rate of Capital Gains Tax (CGT) on residential properties will be reduced from 28% to 24%, starting April 6th, 2024. The lower rate of CGT remains unchanged at 18%. 

 

The budget introduces a new UK ISA specifically designed to encourage investment opportunities within the UK. This new ISA will have a dedicated tax-free allowance of £5,000 on top of the existing ISA allowance. This effectively increases the total tax-free investment allowance from £20,000 to £25,000 per year. 

 

Some parents with children will benefit from an increase in the High Income Child Benefit Charge threshold. This threshold will rise from £50,000 to £60,000 from April 6th, 2024. Additionally, the taper range, where child benefit repayments become necessary, will increase from £60,000 to £80,000. 

 

 

The government's Recovery Loan Scheme, designed to help businesses access financial support post-pandemic, has been extended until March 2026. This scheme offers a 70% government guarantee on loans up to £2 million for businesses in Great Britain and £1 million in Northern Ireland. 

 

Self-employed individuals can now claim tax relief for training expenses incurred to maintain or update their skills. HMRC has released new guidance clarifying that costs associated with keeping pace with technological advancements or industry changes are considered allowable deductions from taxable profits. 

 

The Furnished Holiday Lettings (FHL) regime, offering specific tax advantages for short-term rentals, will be abolished in April 2025. This means both short-term and long-term lets will be subject to the same tax regulations. 

 

The government has opted to freeze fuel duty for another year, extending the 5p cut introduced in 2022 until March 2025. 

 

Air Passenger Duty (APD) for premium economy, business, and first-class airfare will increase to account for recent inflation. Economy class APD will remain unchanged. 

 

At BSB, we understand that navigating these changes can be complex. We're committed to keeping our clients informed and ensuring they take full advantage of all relevant tax benefits. If you have any questions or require assistance in understanding how these measures impact your business or personal finances, please don't hesitate to contact us.