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Spring Budget 2024

March 8, 2024

It’s that time again, and two days ago Chancellor Hunt stood up and revolutionised the UK tax landscape with dramatic changes across the board. 

Ok, that might be a bit of an exaggeration, or even complete hyperbole, but The Budget is still a key date in the economic calendar for the United Kingdom. The changes this year were interesting, the further cut in national insurance from 10% to 8% will, even if not in any way surprising having been widely leaked, at least be warmly welcomed by millions of working people, making a material difference in pay packets at a time when, to quote a supermarket, every little helps. 

Of perhaps more interest for the long term, and definitely more surprising was the British ISA – an additional ISA allowance designed to promote investment into UK plc. There wasn’t a lot of detail and indeed this did feel like a bit of last minute market hype to get people excited – but it is an idea that has worked in other countries to promote investment in domestic businesses, so it could be interesting if the consultation delivers a workable solution. 

Property investors will welcome the 4% cut in the higher rate of capital gains tax as it applies to investment properties – but if previous rumbles about CGT from the opposition (and according to the polls, the next government) continue, then it may be a short lived respite, and far from buoying up the property market, may cause property investors to get out while the getting is good – or at least better than it was or may be. That would free up much needed housing stock for first time buyers, potentially at a lower price point than now, but will exacerbate the chronic shortage in affordable property to rent. A notable exception regarding property was any mention of promoting house building or home ownership in any meaningful way, this has been an on off promise for a few years but has proven hard to deliver with the UK planning system uncoordinated, complex, and expensive. At our current unprecedented levels of immigration the country needs hundreds of thousands of new homes, and shifting property between rental and home ownership doesn’t do much to alleviate the problem – but that isn’t perhaps something the budget can address on its own.

One much talked about possibility came to pass, with the Chancellor addresses the uncomfortable subject of non-dom tax status – the idea that a billionaire can benefit from making their home in the UK, but provided they don’t spend any of their money here, can avoid paying tax on their worldwide income as a UK domiciled individual would. This has been a thorn in the side of the Conservative party for a while, with the Prime Minister’s own wife allegedly benefitting from this relief to the sum of millions of pounds a year. Labour have declared it in their sights for a while, so Chancellor Hunt was spiking their guns as much as raising revenue, but it moves the dial.

Other budget announcements were more ‘plus ça change, plus c’est la même chose’ than anything truly exciting, with a wide range of allowances still frozen, and previous promises retained.

For a deeper dive into the changes, and how they might affect our clients, Walden Capital has produced a useful budget guide, which will include some planning ideas that might be of value. Download it now and have a read.

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The latest news, information and opinion on the current financial situations and trends plus useful guides to investing, pensions and making the most of your wealth.

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