While this reduction in NICs may not be as impactful as a speculated cut to the Income Tax rate, it is expected to provide some relief for the workforce, particularly those feeling the financial strain. However it’s worth noting that the continued freeze on tax thresholds could gradually diminish the benefits of this NICs reduction over the next four years.
The Chancellor plans to finance this reduction through increased duty on tobacco and vapes and changes to the tax system for non-UK domiciles. The latter will result in higher taxes paid to the UK on foreign income and profits while encouraging inward investment by eliminating the ‘remittance basis’ taxation for these individuals.
Hunt also announced easing the Child Benefit income threshold, changing different taxes and revamping the Individual Savings Account (ISA) system, introducing a new British ISA. This allows an extra £5,000 tax-efficient investment into UK equities beyond the current limits, which remain unchanged. Along with a new British Savings Bond, this measure aims to incentivise people to invest in UK-centric assets, with the goal of stimulating the economy in a targeted way.
What does the Spring Budget Statement 2024 mean for you, your family and your business?
Our review of the Spring Budget 2024 delves into the main announcements. If you need additional information or wish to explore how these measures might impact your finances or business, please contact us for a more in-depth discussion and details.
Download the Guide to the UK Spring Budget 2024
