Spring Budget overview
VAT THRESHOLD
After seven years of being frozen at £85,000 the VAT registration threshold will be increased to £90,000 on 1 April 2024, with the de-registration threshold also increasing to £88,000.
While this is a positive change for some smaller businesses it will likely have marginal impact.
FULL EXPENSING MADE PERMANENT
Capital Allowance full expensing, which allows you to deduct 100% of capital equipment cost from profit in the year purchased, has been made permanent from the scheduled end date of March 2026.
HIGH INCOME CHILD BENEFIT CHARGE
The current threshold before the Child Benefit is clawed back is £50,000 with it fully repayable at £60,000.
This threshold is being increased to £60,000 and fully repayable at £80,000. There are plans in the future for this to be evaluated on a total household income basis, but that is beyond next election.
NATIONAL INSURANCE CHANGES - AFFECTS EMPLOYEES
There has been further cuts to the NIC rates on top of the Autumn budget changes which came into effect in January. This impacts the amount of NICs employees pay but not employers.
A further reduction in employee Class 1 NIC rate from 10% to 8% payable on earnings between £12,570 and £50,270, effective 6 April 2024. Increasing your employees take home pay, and you pay no more
For self-employed/soletraders – Class 2 NICs abolished, effective 6 April 2024
For self-employed/soletraders – Class 4 NIC rate reduced from 9% to 6%charged on profits between £12,570 and £50,270, effective 6 April 2024. A further decrease from the 8% previously proposed
No change to Personal Allowance or National Insurance thresholds
REDUCED CAPITAL GAINS TAX ON RESIDENTIAL PROPERTIES
The higher rate band for Capital Gains Tax on non-primary residential properties has decreased from 28% to 24% for property sales that exchange on or after the 6 April 2024.
Another change is that furnished holiday lettings will be treated as property investment businesses from 6 April 2025 increasing the tax burden on these assets.
