When Budget Day approaches, excitement builds around the contents of the speech contained within the Chancellor’s famous red dispatch box.

In 2023, the Autumn Statement was preceded by a lot of noise around possible cuts to Inheritance Tax, which ultimately failed to materialise. This Spring, the expectation was that Chancellor Hunt might make headline-grabbing, voter-friendly changes in what was the last Budget before a General Election.

But, again, the forecasts were not all entirely on the mark. Not only was the topic of Inheritance Tax avoided, but the Chancellor also declined to make any changes in relation to either Income Tax bands or Income Tax rates.

There were, however, plenty of other changes, with potential implications for people in work, parents, small businesses, owners of multiple properties, and those not domiciled in the UK.

Key measures included:

• Cutting the main rate of employee National Insurance by 2p from 10% to 8% from 6 April 2024. This follows a 2p cut announced in the Autumn Statement of 2023. The government claims these measures will save the average worker earning £35,400 more than £900 a year.

• Cutting an additional 2p from the main rate of self-employed National Insurance, further to the 1p cut announced in the Autumn Statement. From 6 April 2024, this brings the main rate of Class 4 NICs for the self-employed down from 9% to 6%. Combined with the abolition of the requirement to pay Class 2 NICs, the government says this will result in savings of around £650 a year for an average self-employed person on £28,000.

• Raising the threshold for the High Income Child Benefit Charge to £60,000 and halving the rate of the charge so that Child Benefit is not repaid in full until you earn £80,000. In addition, the Chancellor committed to move to a system based on household rather than individual incomes by April 2026.

• Abolishing the tax rules for non-UK domiciled individuals, or non-doms, and replacing them with a residence-based regime from April 2025. This means all UK residents who stay in the UK for over four years will pay the same tax on their foreign income and gains, regardless of their domicile status.

• Abolishing the Furnished Holiday Lettings tax regime from April 2025; reducing the higher rate of Capital Gains Tax on residential properties from 28% to 24% from April 2024, with a view to encouraging sales (the lower rate will remain at 18%); abolishing Multiple Dwellings Relief (which reduced Stamp Duty for multiple property purchases) from 1 June 2024.

• Increasing the VAT registration threshold from £85,000 to £90,000 for small businesses. This follows the extension to the 75% business rate relief announced in the Autumn Statement for eligible retail, hospitality and leisure properties for 2024-25.

• Introduction of a UK ISA, adding a further £5,000 to the current £20,000 annual ISA allowance on the proviso that investments are focused on UK companies. A consultation on the proposal will run from 6 March to 6 June. As with other forms of ISA, the so-called ‘British ISA’ will benefit from no tax being due on income or capital gains.

The full details of all announcements can be found on the Government website.

In his introductory comments, the Chancellor was keen to highlight the fact that inflation had more than halved from its recent peak and that, as a result, wages were rising in real terms.

But with the UK also currently contending with a technical recession and the impact of cost-of-living increases, many commentators also noted that the Budget did little to address the issue of fiscal drag, which continues to hang over the personal finances of those benefiting from wage increases.

Indeed, the Office for Budget Responsibility (OBR), which is tasked providing independent analysis of the UK’s public finances, suggests that by 2028 around 3.7 million more people will be paying Income Tax and 2.7 million will move into the higher rate bracket.

So, while the 2024 Spring Budget might have delivered benefits in some unexpected areas, the absence of the eagerly anticipated headline changes to key areas of taxation means that its impact could continue to be felt in the years to come.

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