Chancellor Jeremy Hunt has unveiled the government’s tax and spending plans, and forecasts for the economy in his Spring Budget ahead of this year’s General Election.
Unveiled was a plan to reduce debt, cut taxes and reward work aimed at building a stronger and more resilient economy.
The key economic points include:
- Inflation has fallen faster than expected, and should drop below the UK’s 2% target later this year.
- The medium-term outlook for growth is little changed, compared to November, partly due to higher economic inactivity.
A Spring Budget for Businesses
Self Employed National Insurance Contributions
The rate of National Insurance for self employed individuals will be reduced from 8% to 6% from 6 April 2024.
VAT Thresholds
The VAT registration threshold is being raised from £85,000 to £90,000, the first increase in seven years.
A Spring Budget for People
Employee National Insurance
The main rate of Employee National Insurance will be cut by 2% from 10% to 8%, coming into effect from 6 April 2024.
Child Benefit
The Chancellor says he will consult on a new rule to make the benefit to apply to collective household income, rather than on an individual basis, which he aims to introduce by April 2026.
But, as a more imminent help, the threshold will go up from £50,000 to £60,000 and the top of the taper at which it is withdrawn will go up to £80,000 – from the current £60,000.
Capital Gains Tax
The higher rate of property capital gains tax is to be reduced from 28% to 24%.
Duty
Freeze on alcohol duty, which had been due to end in August, to continue until February 2025
Fuel duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year
New excise duty will be introduced on vapes, and there will be higher air passenger duty on business class flights.
Chancellor’s closing statement
We stick to our plan with a Budget for Long Term Growth. It delivers…
More investment. More jobs. Better public services. And lower taxes.
A plan to grow the economy. A plan for better public services. A plan to make work pay. Growth up, jobs up and taxes down.
