The Chancellor of the Exchequer, Jeremy Hunt, has this afternoon (6th March) unveiled his Budget for 2024. A 'Budget for long term growth' that aims to deliver more investment, more jobs, better public services and lower taxes. 

I have summarised some of the key announcements below:

Lower taxes:

The Chancellor delivered further tax cuts for working people – rewarding work, boosting growth and helping families with the cost of living. 

• Following a 2%  cut in the Autumn Statement, the main rate of Employee National Insurance will be cut again by a further 2% from 10% to 8% in April – a one-third reduction in the main rate of National Insurance, which means the average worker on £35,400 will receive a tax cut of over £900 compared to last year.
• Following a 1% cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will be cut by a further 2% from 8% to 6% from April - saving the average self-employed person on £28,000 over £650 compared to last year when combined with scrapping the requirement to pay Class 2 NICs announced at Autumn Statement.
• High-Income Child Benefit Charge (HICBC) will be administered on a household rather than an individual basis by April 2026, with a consultation in due course, while around half a million working families will benefit from an increase in the threshold from £50,000 to £60,000 and raising the level at which Child Benefit is fully repaid to £80,000 – worth £1260 per family on average.
• The main rates of fuel duty will be frozen again until March 2025 with the temporary 5p cut also extended, saving car drivers around £50 this year and £250 since the 5p cut was introduced – a £5 billion tax cut.
• The six-month alcohol duty freeze announced at Autumn Statement will be extended until 1 February 2025, saving consumers 2p on a pint of beer, 1p on a pint of cider, 10p on a bottle of wine and 33p on a bottle of spirit compared to if the planned rise had gone ahead. This will benefit 38,000 pubs across the UK, while reducing inflation this year.
• The higher rate of Capital Gains Tax (CGT) on property will be cut from 28% to 24% from April 2024 – firing up the residential property market and supporting thousands of jobs that rely on it.
• Building on the single biggest investment in childcare in English history, nurseries and preschools will be protected from rising costs through a guarantee that future funding will rise with a combination of inflation, earnings and the National Living Wage – certainty the sector needs to expand and deliver the rollout, which will save some parents using the full 30 hours up to £6,500 a year.
• The most vulnerable families will receive targeted support through a £500 million extension to the Household Support Fund for an extra 6 months to September 2024, helping local authorities to support people with the cost of essentials, as well as abolishing the £90 fee for Debt Relief Orders so households struggling with problem debts can get the help they need, and extending the maximum period for Universal Credit budgeting advances from 12 to 24 months.

Public services 

While growth is key to delivering high-quality public services, the Chancellor backed the NHS with more funding and outlined the first steps towards getting public sector productivity back to pre-pandemic levels. 

• Day-to-day public spending will increase by 1% higher than inflation on average over the next parliament, as the Chancellor confirms spending levels will not be cut.
• The Public Sector Productivity Plan announced today with a £4.2 billion investment will improve public service delivery and get better value for taxpayers’ money through better tech, freeing frontline workers from time-consuming admin and making earlier interventions to reduce costs later down the line.
• The NHS will receive an additional £3.4 billion as part of this to invest in new tech and digital transformation, including making the NHS app a single front door for patients, piloting new AI to halve form-filling times for doctors, rolling out universal electronic patient records, and over one hundred upgraded AI-fitted scanners so doctors can read MRI scans more accurately and quickly. This improves patient care and helps unlock £35 billion in productivity savings by 2030.
• This means the NHS can commit to raising productivity in the NHS to 2% on average by 2028-29, at the upper end of the 1.5-2% ambition in the Long Term Workforce Plan – delivering a health service fit for the future. The NHS also gets a £2.5 billion funding boost for 2024/25.
• £800 million will be invested to boost productivity across other public services, including £230 million for drones and new technology like facial recognition which will free up police officers’ time for more frontline work and £75 million to roll out the highly successful Violence Reduction Unit model across England and Wales.
• This investment in non-NHS public services will help deliver up to £1.8 billion of benefits by 2029, with further measures including digitising jury bundles to free up 55,000 working hours spent on admin, creating 200 new children’s social care place to tackle overspends, and expanding the use of AI across government to make it easier to spot and catch those who try to defraud the public purse.
• Defence spending is expected to hit 2.3% of GDP next year after £11 billion investment announced at Spring Budget 2023.

More investment 

Building on recent investments in the UK by Google, Nissan and Microsoft, the Chancellor announced exciting new investments in key growth sectors and set out plans to support businesses of all sizes to grow. 

• Significant package of support to establish the UK as a world leader in fast-growing industries over the next five years, including over £1 billion in new tax reliefs for creative industries, £270 million in automotive and aerospace R&D projects focusing, and a £120 million top-up for the Green Industries Growth Accelerator, to help build supply chains for offshore wind and carbon capture and storage.
• £45 million will fund medical research to develop new medicines for diseases like cancer, dementia and epilepsy, and the UK’s ability to manufacture them will be boosted by plans for a £650 million AstraZeneca investment to build a new vaccine manufacturing hub in Liverpool and expand their footprint in Cambridge.
• Hundreds of millions in funding to extend the Long Term Plans for Towns to 20 new places, over £240 million to build nearly 8,000 homes in Barking Riverside and Canary Wharf alongside a new life sciences hub, and a new £160 million deal to acquire two site to develop nuclear for our energy security.
• Draft legislation will be published within weeks to extend full expensing – a £10 billion tax cut for business every year to help them invest for less – to leased assets when affordable to do so, strengthening one of the most attractive capital allowance regimes of any major country.
• SMEs will be supported to invest and grow through a £200 million extension of the Growth Guarantee Fund, helping 11,000 small businesses to access the finance they need, and an increase in the VAT registration threshold from £85,000 to £90,000 which will take around 28,000 small businesses out of paying VAT altogether.
• Pensions and savings reforms, including the introduction of a new UK ISA allowing an additional £5,000 annual investment in UK equities tax-free and new British Savings Bonds offering savers a guaranteed rate for 3 years, will deliver better returns for savers.

Sustainable public finances 

The ‘Budget for Long Term Growth’ delivers lower taxes, better public services and more investment in a responsible way, the Office for Budget Responsibilty confirming the Chancellor’s fiscal rules are on track to be met. 

• Underlying debt will fall as a share of the economy to 92.9% in 2028/29 - meeting the debt rule with £8.9 billion headroom. Headline debt will fall as a percentage of GDP every year from 2024/25.
• Public sector borrowing falls in every year of the forecast. The deficit will be 2.7% of GDP in 2025-26 – meeting the second fiscal rule to get borrowing below 3% of GDP three years early - and by 2028-29 it falls to 1.2% of GDP, which is the lowest level since 2001-02.
• Measures to tackle the tax gap will bring in an additional £4.5 billion a year by 2028/29, saving nearly £10 billion for the public purse when combined with policies announced at Autumn Statement.
• The ‘non-dom’ regime will be replaced by a simpler system where arrivals have access to a more generous scheme for their first four years of tax residency before paying tax in the same way as everyone else, raising £2.7 billion a year by 2028/29 without deterring investment.
• The Energy Profits Levy sunset clause will be extended from March 2028 to March 2029 to raise £1.5 billion a year, but legislation in the Finance Bill will abolish the Levy if market prices fall to their historic norm sooner than expected – maintaining investment in our energy security.
• A duty on vapes will be introduced from October 2026 to protect young people and children from the harm of vaping, alongside a one-off increase in tobacco duty to recognise the role vapes play in helping people to quit smoking. This will raise a combined £1.3 billion by 2028/29.
• Multiple Dwellings Relief will be abolished from June after showing no evidence of promoting investment in the private rented sector - raising £385 million a year – and the Furnished Holiday Lettings tax regime will be abolished from April 2025, raising £245 million a year while making it easier for local people to find a home in their community.

A full copy of the Spring Budget 2024 can be found here.