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Budget 2024: A cautious approach to reforms in an election year


As perhaps to be expected, the Chancellor's speech was in the main unsurprising and cautious, with provisions made to support public services, bolster the UK economy, bring down inflation and promote growth and investment.

This afternoon we reflect on the 2024 budget statement delivered by the Chancellor, Jeremy Hunt. As legal professionals, it’s crucial for us to keep up with fiscal policy changes and the potential ramifications such changes have on our clients and within our specialist practice areas.

As usual, tax cuts were made, but – as is also the norm – there were trade-offs to balance the books.

Some of the Chancellor’s key announcements included:

Income Tax

There were no notable changes in the budget speech made affecting income tax rates, UK taxpayers continue to pay the 20% basic rate of income tax on earnings over £12,571, the higher 40% rate over £50,271, and 45% on earnings over £125,140.

One of the significant impacts for owners and operators of holiday rental properties will be the abolition of the Furnished Holiday Lettings Tax Regime. The regime previously provided tax advantages and its removal will likely result in both higher tax liabilities and administrative burden for affected individuals and businesses.

Stamp Duty Land Tax (SDLT)

Of note to property investors is the abolition of the Multiple Dwellings Relief from SDLT.  The relief was aimed at reducing the SDLT burden when multiple properties were bought in a single transaction.  Without this relief investors now face higher SDLT costs when purchasing multiple residential properties thus perhaps reducing the attractiveness of such an investment. Whether this change leads to changes in property prices and market dynamics will have to be seen.

Capital Gains Tax (CGT)

Surprisingly the Chancellor announced a reduction of the higher rate of CGT on residential property disposals from 28% to 24%. In his view; this will result in more transactions and thus more tax revenue.

CGT is only paid on any gains you make when you dispose of assets. To surmise briefly, this is calculated by taking the original purchase price of the assets you are selling from the amount you are selling the assets for.

Inheritance Tax (IHT)

Despite expectation to the contrary there were no changes announced in the Budget speech affecting Inheritance Tax.

Non-domicile rules

Significant changes were announced to the non-domicile tax rules. Individuals who live in the UK, but whose home for tax purposes is overseas are often referred to as non-doms. They previously only paid UK tax on money earned in the UK and were not required to pay UK tax on their foreign income unless they chose to bring it into the UK.

The Government’s intention to create a fairer and more competitive tax system will result in the abolition of the current system for non-doms which will be replaced with a modern residency-based system from April 2025.

From next year, new arrivals in the UK will not be required to pay any tax on foreign income for the first four years but after then – if they still live in the UK – they will be required to pay the same tax as other UK residents.

The Government’s intention to remove the concept of domicile may also impact on an individuals IHT position we wait to see exactly what the outcome here will be.

Those affected by these changes may wish to read the treasury’s technical note on such taxation changes.

National Insurance contributions

With effect from 6th April employees will see a reduction of 2p in the £1 for National Insurance contributions. This means that the main rate falls from 10% to 8% – which could save the worker on an average salary a saving of around £450 a year.

A similar deduction is again offered to the self-employed meaning the rates falls from 8% to 6%.


An increase of the VAT registration threshold from £85,000 to £90,000 will take effect from 1 April 2024. This threshold was last changed in April 2017 and there is expectation that this increase will help support economic growth, simplify administration, as well as stimulate those trading on or around the VAT threshold.

Child benefit

The Chancellor advised that consultation would follow in respect of how a move to a household income system as opposed to an individual income system with effect from April 2026 can be achieved.  As an interim measure, from April 2024 the threshold at which claimants begin to lose their child benefit will be raised from £50,000 to £60,000.

When a parent receiving child benefit starts earning £60,000 or more, they start to lose some of it. For each £100 that parents receive over this threshold, they must repay 1% of the child benefit they receive. By the time they earn £80,000, all the child benefit will be withdrawn.

ISA investments

The current annual investment limit into an ISA of £20,000 has not been changed but the Chancellor has today announced a new British ISA whereby an individual will be able to invest a further £5,000 per tax year into UK assets which can be held in addition to the existing ISA subscription.

Fuel Duty

No government has, since 2011, raised fuel duty – and Jeremy Hunt has not broken away from that stance today.  Duty on petrol and diesel will not be lifted in line with inflation.  Further the “temporary” 5p cut on fuel duty, announced in 2022, which was supposed to come to an end later this month has been extended a further 12 months. This means it will stay at 53p per litre and he claims will save on average car drivers £50 next year.

Air Passenger Duty

Air passenger duty will increase on non-economy seats.

Excise Duty

The Government is introducing a new excise duty on vapes from October 2026 following consultation, this combined with an increase in tobacco duty will seek to raise funds whilst maintaining the incentive to choose vaping over smoking.

Final thoughts

It is worth noting that there were no changes made to the frozen income tax thresholds.  In past budgets there would typically be changes to adjusted tax thresholds to keep pace with inflation.  However, income tax thresholds have remained stagnant for several years, thus creating fiscal drag. This means that as salaries increase, a greater proportion may be subject to taxation.

Moving forward we will continue to scrutinise these announcements and review the impact they may have for our clients.

If you require specific advice or are concerned that any of the changes in the Budget 2024 will affect you or your business, please do get in touch to seek clarification and to discuss further.


Paula Arnold

Senior Associate

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Budget 2024: A cautious approach to reforms in an election year

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