This was the Chancellor’s final Spring Budget before the upcoming election. He emphasized reforms focused on building a tax system that is:
- Simple and understandable: Making it easier for everyone to navigate the tax code.
- Fair and equitable: Ensuring everyone contributes their fair share.
- Adaptable to economic changes: Evolving alongside the economic landscape.
- Supportive of public finances: Contributing to responsible financial management.
Further details to come:
While the key points were outlined, some specifics and consultations are still under development. We can expect additional information and opportunities for public input to be released in the coming weeks.
This summary outlines the key measures affecting businesses announced by the Chancellor in the Spring Budget 2024.
Boosting Investment
Full expensing for leased assets: Businesses will be able to fully deduct the cost of leased equipment in their first year of use, encouraging investment in new technology and machinery. (Start date and final details to be confirmed.)
Supporting Creative Industries
UK Independent Film Tax Credit: A new tax credit offering enhanced support for film production, enabling filmmakers to claim a 53% credit on qualifying expenditures. (Effective for films starting production after April 1, 2024.)
Increased Theatre Tax Relief: Permanent rate increases of 40% and 45% for theatre, orchestra, and museum/gallery exhibition tax relief, taking effect from April 1, 2025.
Extending Business Support
Growth Guarantee Scheme: The existing Recovery Loan Scheme is extended and renamed, offering continued support with government-backed loans for eligible businesses. (Terms remain the same, providing a 70% guarantee on loans up to £2 million.)
VAT Registration Changes and Furnished Holiday Letting Reform
VAT Threshold Increase
Starting April 1, 2024, the threshold for mandatory VAT registration will rise from £85,000 to £90,000 annual taxable turnover. Similarly, the threshold triggering eligibility for VAT deregistration will increase from £83,000 to £88,000. This change aims to reduce the administrative burden of VAT on smaller businesses.
Furnished Holiday Letting Regime Abolished
The government has announced the abolishment of the Furnished Holiday Lettings (FHL) regime, effective April 2025. This removes the tax advantages previously available for landlords renting out short-term furnished properties compared to those offering longer-term residential leases.
Previously, FHL landlords enjoyed benefits like:
- Deducting full mortgage interest costs from rental income.
- Claiming capital allowances on furniture.
- Paying lower capital gains tax upon selling the property.
- Utilising capital gains tax rollover relief.
The removal of these benefits aims to create a more level playing field for all landlords in the rental market.
Key Changes for Individuals
Income Tax:
Personal allowance frozen: No increase until April 2028, remaining at £12,570.
Additional rate threshold: Reduced from £150,000 to £125,140 in April 2023.
Higher rate allowances: Lost gradually as income exceeds £100,000, leading to a marginal rate of 60% up to £125,140.
National Insurance:
Reduced rates:
Employees: Main rate down from 10% to 8% from April 2024.
Self-employed: Main rate down from 8% to 6% from April 2024.
Capital Gains Tax:
Reduced annual exemption: Down from £6,000 to £3,000 from April 2024.
Lower rate for residential property: Reduced from 28% to 24% from April 2024.
Child Benefit Charge:
Increased threshold: Adjusted net income starting point rises to £60,000 from 2024-25 onwards.
Extended taper: Charge gradually increases between £60,000 and £80,000.
New ISA Allowance:
Consultation launched: Proposes a new £5,000 “UK ISA” allowance alongside existing ISA allowances.
Other:
Stamp Duty Land Tax Multiple Dwelling Relief abolished: Removing bulk purchase tax relief from June 2024.
Increased investment in HMRC: Targeting tax non-compliance and strengthening taxpayer protections.
Please note: This summary provides an overview, and further details and potential changes may be announced in the coming weeks.
March 2024