Chancellor Jeremy Hunt has outlined the details of this year’s Budget in the House of Commons, marking the last scheduled Budget before the upcoming general election later this year.
Here’s a snapshot of the key announcements:
Taxation:
- National Insurance, a payroll tax, reduced by 2p in the pound for employees and the self-employed.
- Non-dom tax regime to be replaced with new rules from April 2025.
- Introduction of a £5,000 UK ISA tax allowance for savers investing in “UK-focused” shares, subject to consultation.
Benefits & income support:
- Full child benefits extended to households where the highest-earning parent earns up to £60,000.
- Partial child benefits available for households where the highest earner earns up to £80,000.
- Longer repayment period for people on benefits taking out emergency budgeting loans.
- Extension of the government fund for those struggling with cost-of-living pressures for an additional six months.
- Removal of the £90 admin fee for a debt relief order.
Cigarettes, vapes & alcohol:
- Freeze on alcohol duty extended until February 2025.
- Following a consultation, a new tax on vaping products will commence in October 2026.
- Increase in existing tax on tobacco to maintain the “financial incentive to choose vaping over smoking.”
Transport & energy:
- Fuel duty frozen, with the 5p cut in fuel duty on petrol and diesel extended for another year.
- £160m deal for the UK government to purchase the site of the planned Wylfa nuclear site in north Wales.
- Extension of the “windfall” tax on energy firms’ profits until 2029.
- Increase in air passenger duty for business class tickets.
- Additional £120m for a government fund investing in green energy projects.
Housing:
- Reduction of the higher rate of tax paid on profits from selling property from 28% to 24%.
- Removal of tax breaks for owners of holiday let properties.
Public debt, inflation & the economy:
- UK economy is predicted to grow by 0.8% this year and 1.9% next year.
- Inflation rate is forecasted to fall below the 2% target in the coming months.
- Underlying debt, excluding Bank of England debt, is forecasted to be 91.7% of GDP this year, rising to 92.8% next year.
- Overall day-to-day government spending is to grow by 1% in real terms over the next five years.
- NHS budget is to increase by £2.5bn next year, with an additional £3.4bn up to 2030 to improve productivity.
Business & investment:
- Threshold for small businesses to register for VAT raised from £85,000 to £90,000 from April.
- Extension of the Covid-era government loan scheme for small businesses until March 2026.
- Permanent tax reliefs for touring and orchestral productions.
Other measures:
- £1m allocated for a memorial to honour Muslims who fought for Britain during World War One and Two.
- Introduction of a new tax credit for independent UK films with a budget of less than £15m.
The Budget endeavours to offer economic relief and stimulate growth in anticipation of a highly contested election centred around financial challenges.
These Budget changes may affect you personally or your business. For more information on any aspect of the implications of the Budget, please contact us.
The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.
The value of your investment can go down as well as up and you may not get back the full amount you invested.
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