2024 Spring Budget Breakdown: Key Changes You Should Know

The British Chancellor has announced the 2024 Spring budget, with a combination of surprises and more predictable economic moves from the Conservative government. 

Last Pre-Election Budget

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With the next UK general election hot on the nation’s heels, Chancellor Jeremy Hunt has taken to the House of Commons to share the last budget scheduled before voters take to the polls.

Key Measures From the Spring Budget

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From national insurance cuts to child benefit threshold changes, here are some of the key measures you should know from Hunt’s budget announcement on Wednesday.

1. National Insurance

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National insurance has been further cut back, with the national insurance contribution rate set to 8% from April onward. This follows the 2p cut announced in November, which took the rate from 12% to 10%.

An Extra £450 Per Year

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Hunt stated that the change would result in an extra £450 per year against a £35,000 salary. In an earlier interview with the BBC, he stated his intention to eventually abolish National Insurance entirely. 

2. Inflation and the Economy

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The inflation rate for the UK is expected to fall to below 2% by June, and should sit at 1.5% in 2025. Public debt will make up 91.7% of the GDP this year. 

Predicted Economic Growth

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Hunt shared positive predictions from the Office for Budget Responsibility that the economy is set to grow by 0.08% in the coming year, and a further 1.9% in 2025. A small jump in expectations since November’s autumn statement. 

3. NHS

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 £6 billion will be given to the NHS with £2.5b going to help with day-to-day costs, and £3.4 put toward updating the service’s “outdated” IT systems.

Updating Outdated Systems

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Hunt announced service updates for the NHS as a “landmark public sector productivity plan” which he hopes will be “a model for all our public services”, and will include digitalizing certain hospital processes and increased use of AI.

4. Non-Dom Tax

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The current non-dom tax status will be “abolished” by April 2025, fulfilling a long-held promise of the Labor Party. Hunt reports it will be placed by a “modern, simpler and fairer” system. 

New Plan for Those Living Overseas

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Abolishing the old plan and introducing a new one is expected to generate £2.7 billion per year. The non-dom status allows UK residents who have a permanent residence overseas to not pay tax on international income, a status that Conservatives have defended in the past.

5. Childcare and Child Benefits

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Significant changes have been made to childcare and childcare benefits. First, the income threshold has been raised, so that individual parents who earn £80,000 per year or more will no longer qualify for the benefit, raised from 60,000.

Childcare Rates Changes

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Free childcare funding for parents with children aged nine months or older will be extended for another two years, a move they believe will incentivize another 60,000 new parents to enter their workforce.

6. Alcohol, Cigarettes, and Vapes

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Alcohol levies have been frozen once again, remaining at the same rates until February 2025 when it is expected to rise by 3%, in a move Hunt called “backing the great British pub”.

Smoking and Vaping Changes

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As for cigarettes and vape products, it’s bad news for nicotine lovers. Hunt announced an increase in tobacco duties, and a new tax on imported vape products which will be put into effect on October 2026.

7. Housing 

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Taxes paid on the profits from property sales will be cut down from 28% to 24%, and planned tax breaks for holiday homeowners will no longer be going ahead. There was no mention of the abolishing of inheritance tax which had been rumored in past months. 

Stamp Duty Relief

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Stamp duty relief for homeowners who buy more than one property in England and Northern Ireland will also be scrapped, coming to an end in June. 

8. Transport and Energy

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Like alcohol, fuel levies have also been frozen for another year, with the 5p cut to fuel duty also being extended for another year.

Oil, Gas, and Green

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A windfall tax on oil and gas profits which was introduced in 2022 and set to end on March 2028 has been extended to 2029. £160m will be spent on two nuclear sites, and £120m will be put toward investing in green energy projects.

9. Savings

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The new “British Isa” was announced, which is a tax allowance that will give investors £5000 to invest in UK equities, in a move Conservatives hope will “encourage more people to invest in UK assets”.

British Savings Bond

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A British Savings Bond will also be introduced in April via the National Savings and Investments, offering a guaranteed fixed rate for three years.

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