Naz Financial

A Personal Financial Blog from Naz Miller

Budget 2024: Little Wriggle Room for Hunt

With public finances in a parlous state, Budget 2024 had little room for manoeuvre. Jeremy Hunt clearly wanted to cut taxes and grab a few headlines before the next election but found his hands tied, to a large extent. Nevertheless, he did squeeze a 2% cut in employee and self-employed national insurance, as well as a few other changes to impact employees and savers.

In reviewing the budget, I do it from the perspective of personal finances, specifically those of my clients. But before I look at that, I’ll run you through the main headlines of the budget, again from a personal finance perspective, so not everything will be picked up below.

Headline Budget 2024 Changes

National Insurance down: the Chancellor announced a cut to the main rate of Class 1 employee NICs from 10% to 8% from 6‌‌‌ ‌‌April 2024. At the same time, self-employed NICs (Class 4) will also be cut by 2% So, from April 2024 the main rate of Class 4 NICs will drop from 9% to 6%, as 1% was announced in the Autumn Statement. 

No more Non-Doms: they’re to be abolished. More political than economic, he’s stolen Labour’s plans announced for this some time ago.

New savings opportunities: Hunt announced a new “British ISA” and  a new “British Savings Bond” from next month. More details below.

Higher earners get to keep more of their child benefits: for those earning over £60k.

VAT registration threshold to rise to £90,000 turnover, the 1st rise since 2017.

Self-employed can fully offset training costs against profit.

Furnished Holiday Lets regime to be abolished: short and long term lets treated the same now, for tax purposes.

Higher rate CGT for residential property to be cut: 28% to 24%.

Higher Air Passenger Duty for business and 1st class travel.

No increases on fuel or alcohol duties. Smokers, and now vapers, being taxed more.

 

Full details of the budget are, of course on the governments website, at: https://www.gov.uk/government/topical-events/spring-budget-2024

 

A less-dry summary on video comes from Martin Lewis on YouTube: https://www.youtube.com/watch?v=uGv0oibq8Q8

What the 2024 Budget Means for Personal Finances

In truth, there was little really for savers. The new “British ISA”, gives investors a £5,000 extra tax-free allowance.  (So, 20% to 25%). Hunt’s looking to get those seeking tax-free investments to focus on British industries.

He also launched a new “British Savings Bond” from next month. It’s to be delivered by the state-owned National Savings and Investments (NS&I). It’ll offer a 3-year fixed, guaranteed rate. Details of rates TBD.

For most people in work, there will be some small relief as lower NICs come into force from April, and child benefits will be extended further. For lower earners, there’s very little in this budget. Most of the benefits will accrue to those earning higher salaries, generally in the £26,000 to £60,000 levels. Well, it is an election year. As the Institute for Fiscal Studies put it, “We’ve learned to expect some degree of smoke and mirrors in the Budget. Today was no different.

 

If you want to discuss how your personal finances are impacted, please don’t hesitate to contact me.

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Naz Miller

I'm Naz and I'm a Financial Adviser. Prior to working in private practice, I spent 34 years working at Lloyds Bank in Cambridge and surrounding areas. My work has always focused on helping clients achieve their long-term financial objectives.

Glossary of Personal Financial Terms

AAA Rating

In short, AAA ratings (‘triple-A‘ ratings) are the highest credit rating available for an investment, such as a bond or company.

AAA ratings are issued to investment-grade debt that has a high level of creditworthiness with the strongest capacity to repay investors.

Similarly, the AA+ rating is issued by S&P (Standard and Poor) and is similar to the Aa1 rating issued by Moody’s. It comes with very low credit risk and indicates the issuer has a strong capacity to repay.