Budget 2024 – A final hurrah?

Mark Tibbert, Partner and Head of Tax at Westcotts gives his reaction to the Government Spring Budget 2024.

As the Chancellor stood up today for what will be the last Budget before a general election, and many expect to be the last Conservative budget, there was some mixed expectation over what to expect. With a number of announcements already leaked earlier this week many commentators were wondering whether there was still scope to pull a ‘rabbit out of the hat’ when he stood up.

Having listened to the Chancellor speak for around 70 minutes the general feeling was the announcements were underwhelming. The biggest announcement was a further 2% drop in National Insurance for employees and the self-employed, which is on top of the 2% drop announced in the Autumn. While a welcome tax rate reduction, with no changes to the tax allowances there is the question of is it really a tax cut?

In terms of some of the main tax announcements that are likely to have an immediate impact;

• A drop in the capital gains tax rate for residential property from 28% to 24% from April 2024 will be welcome for those considering selling, and may well help what has been a struggling property market.
• The proposed abolition of the furnished holiday let property tax regime, will need to be considered in more detail. But this was the only announcement made which had any reference to the South West.
• Taking a leaf from Labour, albeit with a reference back to Nigel Lawson in the 1980s, the proposed abolition of the beneficial taxation treatment of non-domiciled individuals was expected and it will be interesting to see how this will work when we see the proposed legislation.
• An increase in the VAT registration threshold to £90,000 from April 2024, was the first increase for nearly 5 years, so while welcome, effectively puts the limit where it would have been with normal annual increases.
• Changes are also to be made to the High Income Child Benefit Clawback increasing the threshold in April 2024 to £60,000 and having the maximum limit increased to £80,000, with further changes to follow in 2026.

Overall though there was little substance in the announcement and it felt more like a campaign speech with multiple references to the oppositions lack of a plan. From my perspective while there were some positives for individuals there was nothing or any benefit for businesses and disappointingly nothing specific funding wise for the South West.