Spring Budget 2024
7th March 2024
A commentary from Ian Kelly, Tax Partner
At times, it feels that Chancellor of the Exchequer Jeremy Hunt has been presenting to the House of Commons forever and a day with his Budgets and Autumn Statements but he has actually only delivered two of each.
The 6 March 2024 Budget was widely perceived, in advance, to be something of a General Election trailer and yet one got the feeling that there could yet be a 2024 Autumn Statement or a second Budget before then, albeit in his Budget response the Leader of the Opposition, Sir Keir Starmer, called upon Prime Minister Rishi Sunak to call a May election.
In a much noisier than of late House of Commons, Hunt had to pause a number of times to allow the Deputy Speaker Dame Eleanor Laing to quieten MP’s, especially on the opposition benches, as he skirted around the periphery of growth, borrowing and interest targets and statistics.
At the outset, Hunt rehashed his “An Autumn Statement for growth” into “A Budget for long term growth” and much of his delivery, when it came to dates and timeframes, hinted at ongoing Conservative rule.
Early doors, there was the unveiling of a Tees Valley Investment Zone that will focus on the digital and creative sector which, Hunt said, will unlock inward investment of up to £175m; productivity; create 2,000 jobs and help “transform communities across the region”.
There was also a mention for Pneuma Group, the parent company of video games developer and publisher Double Eleven, that has committed to making the first new major contribution to the Investment Zone by injecting at least £15m into the group’s growth.
Building on last year’s Autumn Statement making full expensing and the 50% first-year allowance for special rate assets being made permanent, Hunt said that there would be draft legislation for a technical consultation on the extension of full expensing to include expenditure on plant and machinery for leasing.
Hunt quickly continued to announce an increase of £10,000 to £90,000 of the VAT registration threshold from 1 April 2024; a British ISA to provide for an additional £5,000 tax free allowance to encourage UK investment and an extension of the new NHS IT system and productivity plan into other public departments and the police.
There was also a promise of more HMRC resources to reduce the tax gap.
The first big hit came in the form of the abolition from 6 April 2025 of the Furnished Holiday Letting (FHL) legislation and its treatment moving forward being aligned to the letting of normal residential property. The small print highlighted an anti-forestalling rule from Budget Day to prevent the use of unconditional contracts to gain Capital Gains Tax (CGT) relief under current FHL rules.
Whilst this was one announcement that had been widely leaked, what followed, the reduction in the main CGT rate from 28% to 24% from 6 April 2024; the lower rate of 18% being retained for gains that fall within an individual’s basic rate band, was a surprise.
Number two in Hunt’s chart of major announcements followed in the form of the abolition of the UK “non-dom” rules from 6 April 2025 to be replaced by a “fairer and simpler” system, one that would see there being no liability to UK taxation on foreign income for the first four years after coming to the UK and after the first four years being taxed under the same basis a UK resident.
Another trialled change concerned aspects of Child Benefit (CB) that have long been felt to be unfair. Hunt drew attention to the £50,000 earnings threshold whereby one home with two parents each earning £49,000 would receive CB yet the home next door with one earning parent with income of £50,000 or over would suffer a tapered reduction. His solution was a move to a household income calculation method from 6 April 2026. In the meantime, there would be an increase in the income limit from 6 April 2024 to £60,000 and a top tapering tier income figure of £80,000.
By now in full flow, Hunt wheeled out perhaps the biggest pre-Budget leak of a further reduction in National Insurance Contributions (NIC). Quite clearly trumpeting this over reviewing the frozen tax allowances, tax rates and thresholds, Hunt announced a further cut, following those of the 2023 Autumn Statement, in the employee rate from 10% to 8% and in the self-employed rate from 8% to 6% and the promise of an ongoing commitment to further NIC reductions.
So, was this a pre-election Budget?
It didn’t really feel like one and yet it’s odds-on that it will be. Hunt had, in advance, promoted the need for restraint and, in not tinkering with those income tax aspects mentioned above, he was as good as his word.
He also managed to steal some of Labour’s clothes and laid down a challenge to Labour as to what they’d keep and what they’d jettison.
The answers lie ahead.
You can discuss the budget with Ian by emailing