On Wednesday, 6 March, Jeremy Hunt, the Chancellor of the Exchequer, addressed the Commons to deliver the Spring Budget 2024.
The Chancellor made a significant announcement, revealing a further 2p cut in Class 1 National Insurance Contributions (NICs). He said this move is part of his strategy to support families through ‘permanent cuts in taxation’, demonstrating a commitment to long-term growth.
While this reduction in NICs may not be as impactful as a speculated cut to the Income Tax rate, it is expected to provide some relief for the workforce, particularly those feeling the financial strain. However, it’s worth noting that the continued freeze on tax thresholds could gradually diminish the benefits of this NICs reduction over the next four years.
The Chancellor plans to finance this reduction through increased duty on tobacco and vapes and changes to the tax system for non-UK domiciles. The latter will result in higher taxes paid to the UK on foreign income and profits while encouraging inward investment by eliminating the ‘remittance basis’ taxation for these individuals.
Mr Hunt also announced easing the Child Benefit income threshold, changing different taxes and revamping the Individual Savings Account (ISA) system, introducing a new British ISA. This allows an extra £5,000 tax-efficient investment into UK equities beyond the current limits, which remain unchanged. Along with a new British Savings Bond, this measure aims to incentivise people to invest in UK-centric assets, with the goal of stimulating the economy in a targeted way.
What does the Spring Budget 2024 mean for you?
Download our guide for an analysis of the key announcements and practical implications for you, your family and business.
