Spring Budget 2024

Mar 14, 2024

National Insurance Cut

The big headline last week's budget was Hunt's two percentage point cut to national insurance, a payroll tax that pays for certain state benefits. This will start in April.

In essence it is cheaper for the government to cut national insurance than income tax as it applies to fewer people. With a General Election looming, a cut in income tax would have had more impact as this keeps the overall tax take at its highest level in over 70 years.

New Great British ISA

Hunt confirmed government plans to introduce a Great British ISA. This savings product will give investors a £5,000 allowance exclusively for U.K. equities in addition to the existing ISA savings allowance of £20,000.

Child benefit threshold rise

In a surprise move, Hunt raised the threshold at which high-income families have to start paying back their child benefit. Currently, if either partner in a couple earns over £50,000, they get less benefit; once a partner hits £60,000 it’s withdrawn completely. 

These two thresholds are being moved in April 2024 to £60,000 and £80,000, respectively. 

Alcohol, cigarettes and fuel

Hunt confirmed that levies on alcohol and fuel have been frozen again,
both for another year. However, Hunt announced a new tax on vaping products to take effect in October 2026, alongside an increase in tobacco duty.

VAT threshold rise

The VAT threshold — the point at which small firms start paying the tax — is being raised for the first time in seven years. It is only a relatively small increase from £85,000 to £90,000.

What wasn't in the budget

There were rumours of cuts to income tax and also that Hunt may scrap inheritance tax, however neither appeared in last week's budget.