Spring Budget 2024 Highlights

11 March 2024

Last week Chancellor Jeremy Hunt delivered his Spring Budget:

• Employee National Insurance sees a 2% reduction: Starting April 2024, the new NI rate will be 8%, down from the previous 10% (initially 12%).

• Further reduction in Class 4 NICs: As of April 2024, there will be an additional 2% reduction in Class 4 National Insurance contributions (originally 9%, now 6%) applied to profits ranging from £12,570 to £50,270.

• Increased High Income Child Benefit Charge threshold: Effective April 2024, the highest earning parent can now earn up to £60,000 to qualify for full child benefit, compared to the previous limit of £50,000.

• Pension lifetime allowance abolished: As of April 2024, the current £1,073,100 lifetime limit before a pension becomes taxable will be eliminated.

• Introduction of the British ISA: A new tax-free £5,000 ISA allowance for investment in UK equities is introduced from April 2024, supplementing the existing £20,000 allowance.

• Reduction in Higher Rate Capital Gains Tax: Starting April 2024, individuals earning over £50,270 will experience a 4% cut in Capital Gains Tax, decreasing from 28% to 24%.

• Scrapping of Furnished Holiday Lettings tax regime: From April 2025, landlords will no longer be allowed to deduct mortgage interest payments from their rental income.

• Withdrawal of Stamp Duty relief for multiple dwellings: Individuals looking to purchase additional properties will no longer be eligible for stamp duty relief.

• Increased VAT threshold: Effective April 2024, the threshold for small businesses to register for VAT is raised from £85,000 to £90,000.

• Frozen Alcohol and Fuel Duty: The current freeze on alcohol duty is extended until February 2025, and fuel duty cuts remain in place for another year.

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Homebuyers in Stamp Duty Sprint Before April Hike

by PH186232 • 20 February 2025

With the 1st April deadline looming, its reported that 550,000 homebuyers are racing to complete purchases before stamp duty jumps back to its 2022 levels. We have read that sales awaiting completion are up 25% from last year, with an average five-month wait putting pressure on buyers to beat the deadline. Currently, first-time buyers pay no stamp duty on homes up to £425,000 when purchasing a property worth up to £625,000, but from 1 st April, that drops to £300,000. The upper limit will also fall from £625,000 to £500,000. It's not just the first-time buyers taking a hit, currently stamp duty is only owed on amounts over £250,000, however from 1 st April, only the first £125,000 will be exempt. Despite the cost increase, it looks like most buyers are still pressing ahead, with some even renegotiating offers to offset the hike. According to our research, regardless of the impending cost increases, property experts such as Rightmove are predicting the demand to stay strong; especially if interest rates continue to fall. With mortgage rates already dipping below 4%, we believe buyers remain hopeful for a more affordable market ahead.