Jeremy has been listening to his wavering constituents, but will his policies result in ‘more jobs, more investment and lower taxes?’
‘Permanent tax cuts’ were mentioned during the speech, but is anything permanent in economics or politics?
Today’s announcements included:
- A further reduction to National Insurance (NIC) by 2% for employees and the self-employed from 6 April 2024. The plan is still to abolish Class 2 National Insurance.
- A reduction in Capital Gains Tax (CGT) from 28% to 24% for higher rate tax payers (including Trusts and Estates) selling residential property from 6 April 2024 – that’s five CGT rates to contend with!
- The thresholds at which Child Benefit is tapered/removed will increase from April 2024 (and there are further plans to make it fairer).
- A plan to extend full expensing and the 50% first year allowance for businesses who lease assets (but only when it’s affordable).
- An increase in the VAT registration threshold by £5,000 to £90,000 from 1 April 2024 – it’s been a long time coming!
- The introduction of a British ISA to encourage a further £5,000 Income Tax and Capital Gains Tax (CGT) free investment in UK businesses.
- Tax credits available to the creative industries (especially film productions) will rise and the 80% cap on costs of visual effects is to be removed.
- Corporation Tax Rates of 25% (or 19% – the small profit rate) are here to stay.
But
- Tax breaks on Furnished Holiday Lettings (FHLs) are to be abolished from next April.
- Stamp Duty Land Tax (SDLT) Multiple Dwelling Relief on the purchase of more than one dwelling at once, after 1 June 2024, will no longer be available.
- The taxation of Non-UK domiciled individuals will be replaced with ‘modern, simpler and fairer’ arrangements from April 2025.
- IHT Agricultural Property Relief (APR) and Woodlands Relief for land owned by individuals, Estates and Trusts can only be claimed on UK land, from 6 April 2024.
Apparently, our personal taxes are the lowest they’ve been since 1965 but increases in income, such as a pay rise or the state pension, will be affected by ‘fiscal drag’ as a result of frozen allowances and tax rate bands.
Inflation is around 4% and the Office of Budget Responsibility (OBR) expect it to fall by at least another 2% by the summer – if our disposable income does increase, we will also benefit from the freezing of fuel and alcohol duty for another year!
For a deeper analysis and further commentary, read our report below. Please feel free to share with friends and colleagues.
If you would like to discuss how today’s announcements affect you, pick up the phone and speak to one our friendly advisers on 01223 810100
