Category: Budget changes and thresholds

Today the Chancellor delivered his Spring Budget, most of which had already been announced in the Press. Below is a summary of some of the main points of interest, but the full statement can be found here.

National Insurance Cuts

Following on from the previous cuts in January, and to further level up the tax system for workers, Employee National Insurance Contributions will reduce from 10% to 8% from April. The self employed will also see a similar cut from 8% to 6%.

VAT

Having been frozen for a long time now, the VAT registration threshold will increase from £85,000 to £90,000 from April.

Child Benefit Charge

From April 2024, the high income child benefit charge will now start at £60,000 (instead of £50,000), and the rate at which it’s charged will halve, with the full taper now only taking effect at £80,000 (instead of £60,000). Longer term, the charge is to be moved to be based on household income from April 2026.

Property Taxes

In a bid to free up more housing, the beneficial reliefs currently available for holiday lets will be abolished from April 2025. And to encourage more landlords to sell their properties, the higher rate of property Capital Gains Tax will be reduced from 28% to 24%.

ISA’s

A new British ISA, will allow an additional £5,000 allowance for investment in British equities.

Today the Chancellor, delivered his Autumn Statement, which as a result of the drop in inflation, tax cuts were the main topic of discussion. Below is a summary of some of the main points of interest, but the full statement can be found here.

National Insurance Cuts

Employee National Insurance is to be cut by 2% to 10% with effect from 6 January 2024.

Class 4 National Insurance for self employed will be cut by 1% to 8% from April 2024.

And Class 2 National Insurance, also paid by self employed, is to be abolished entirely, although those who need to make voluntary contributions towards their state pension record, will still be able to do so.

National Living Wage

From April 2024, the National Living Wage will rise from £10.42 per hour to £11.44 per hour. This will now apply to anyone over the age of 21.

Business Rates

The small business multiple is to be frozen for another year, and the 75% discount for retail, hospitality and leisure businesses is to be extended too.

Capital Allowances

Full expensing for capital expenditure will be made permanent, meaning companies will be able to get tax relief on the full cost of new plant and machinery in the year of purchase, in addition to the Annual Investment Allowance threshold.