What has changed in the spring budget; Will I be affected?
Yes, you will certainly be affected by some of the changes announced in the spring budget which took place on 6 March 2024. Some announcements made will not be effective until after the upcoming election so there can be no certainty about these. Gov.uk
However, some changes in the budget will take place virtually immediately and these are the ones which you need to be aware of. There are some proposals for which you may want to plan.
Here are some of the measures which might be most relevant to you:
VAT REGISTRATION THRESHOLD INCREASED
The VAT registration threshold will be increasing from £85,000 to £90,000 and the deregistration has also increased from £83,000 to £88,000 from 1 April 2024. The government hopes this move will reduce the admin and financial burden of VAT for small businesses. We are sure that this will be a welcome change for some of our clients and small business owners who hover around the threshold.
NATIONAL INSURANCE RATES REDUCED
Your employees (and perhaps you) may benefit from a reduction in Class 1 primary (Employees’) National Insurance contributions from 10% to 8% from the 6 April 2024 – the start of the new tax year
If you are self-employed you will benefit from a reduction in the rate of class 4 (self-employed) NICs from 8% to 6% from 6 April 2024. How much this is worth to you depends on your taxable profit.
CAPITAL GAINS TAX REDUCED FOR SALES OF RESIDENTIAL PROPERTIES
This doesn’t apply to the sale of your primary residence because this qualifies for full relief. However, it does apply if you sell a property which has been let or is a second home.
- Higher Rate Capital Gains Tax was charged at 28% and this is being reduced to 24% from 6 April 2024
- Basic Rate tax remains at 18%.
- Don’t forget that if you sell a residential property which is subject to Capital Gains Tax, the sale must be reported within 60 days and any tax due also paid within the 60 days. If you are selling a property which may be subject to CGT, it is best to let us know before the property is sold because the 60 day clock starts ticking on the completion date.
HIGH INCOME CHILD BENEFIT CHARGE THRESHOLD INCREASED
This may affect you if you or your spouse/partner receive Child Benefit. Previously, if either income exceeded £50,000 per annum, some of your Child Benefit had to be repaid (or not claimed) and once either individual’s income exceeded £60,000, the whole of any Child Benefit was repayable.
From 6 April 2024, the threshold at which Child Benefit starts to be reduced or repaid will increase to £60,000 and the “taper” will be over £20,000 to £80,000.
There is a consultation to take place to consider changing the High Income Child Benefit Charge to a household basis, rather than on an individual basis. This is possibly scheduled for April 2026.
RECOVERY LOAN SCHEME EXTENDED – AND RENAMED
- The Recovery Loan Scheme will be extended and renamed the Growth Guarantee Scheme.
- This will now run until March 2026. Under the scheme, the government guarantees 70% on loans of up to £2 million (except only £1 million in Northern Ireland)
FURNISHED HOLIDAY LETS
If you have properties classified as FHL (Furnished Holiday Lets) you should be aware that the proposal is to scrap the tax advantages which FHLs have over ordinary property lets. This is scheduled for April 2025.
One obvious difference is that the restriction on claiming tax relief on mortgage interest will apply. This may make it prudent to consider any mortgage/loan you may have,
WE ARE HERE TO HELP
If there is anything that you are unsure about or how it could affect you, please feel free to contact us by any of the usual methods:
Telephone – 01509 816150
Email – enquiries@centralbusiness.co.uk
Webform – below