Spring budget 2024 announcements that may affect our clients.

It’s not a particularly interesting budget with a few predicted giveaways since it’s an election year, but a few stings in the tail, too!

National Insurance (NI)

The rate of Class 1 NI paid by employees will fall again from 10% to 8% from 6 April 2024, but no change to the employer’s rate or to the employer’s allowance either, which remains at £5,000 for 2024/25.

The self-employed are also getting a further NI reduction from 6 April 2024 to 6%, instead of 8% previously announced in the Autumn statement 2023. We will check all our small limited companies with profits under £50k to make sure it makes sense to remain limited but there are often other advantages of incorporation to consider.

All the other National Insurance rates & thresholds remain the same.

Personal tax

Dividend allowance reducing from £1,000 to £500 from April 2024.

No change to income tax rates or any other personal tax allowances/thresholds which are all frozen until April 2028.
Capital gains tax annual exemption (tax-free limit) reduced from £6,000 to £3,000 from 6 April 2024 but no change to the capital gains tax rates.

The clawback of Child Benefit will now start at £60,000 instead of £50,000 from 6 April 2024 and 1% of the benefit will be clawed back for every £200 earned over £60,000 up to £80,000. This is a welcome relaxation that takes the child benefit threshold further away from the end of the basic rate tax band of £50,270.

Then there was an announcement that the clawback of Child Benefit will be based on HOUSEHOLD income from 6 April 2026. This involves using a different system to calculate the clawback so don’t be surprised if the idea gets shelved post-election as it’s too difficult to implement and hopefully the clawback will get scrapped altogether!

Non-UK domiciled tax payers will now have to pay full UK tax on all their worldwide earnings after 4 years of residence in UK, instead of 15 years which seems fair.

The “triple lock” for state pension will be maintained to ensure that state pension rates continue to increase with the cost of living.

There is an extension of £5k to the normal annual ISA allowance of £20k if you invest in UK equities.

An inflationary increase will be applied to airline duty for non-economy and private jet passengers.

Alcohol & fuel duty remain unchanged with duty on vaping coming in but not until 2026, so one for a new government to work out.


No changes to corporation tax rates.

The VAT registration threshold was increased slightly by £5k to £90k from 1 April 2024 for rolling 12 month turnover. This won’t have a huge effect given the recent 10%+ inflation but talk to us if you’re getting close as it gives a little wiggle room!

Full expensing i.e. 100% capital allowance on plant & machinery purchases and 50% capital allowance on “special rate expenditure” has been made permanent and will be extended to leased assets when the government “can afford to do so”! However this doesn’t affect most of our small business clients who would continue to utilise the Annual Investment Allowance of 100% on their first £1m of qualifying asset expenditure.

The existing SME R&D scheme will be merged into the large company RDEC scheme for accounting periods commencing on or after 1 April 2024, unless you’re an R&D intensive small company (R&D expenditure represents at least 30% of your total expenditure from 1 April 2024). This represents a significant reduction to the tax credit that will be received and it’s calculated in a totally different way too. Overseas subcontracting costs will also be excluded from the claim.

The National Minimum Wage is increasing to £11.44 from April 2024 for over 21s (previously £10.42 for over 23s so DO CHECK YOUR PAY RATES). This represents an increase of 9.8% unless you are aged 21 to 22, in which case it is 12.4%! The state pension is increasing by 8.5% and benefits such as universal credit by only 6.7%.
The Growth Guarantee Scheme, effectively the third iteration of the Covid Recovery Loan Scheme, will support lending of up to £2 million to smaller businesses up until 31 March 2026 by offering 70% government security guarantees to lenders.

HMRC has clarified that training with the purpose of updating existing skills; maintaining pace with technological advancements; or understanding changes in industry practices are deductible costs for a self-employed business.


Capital gains tax payable by higher rate taxpayers on residential property sales (not covered by principal property relief) will decrease to 24% from 28% for sales that exchange after 6 April 2024. This risks further delaying some property transactions into April 2024 but the government hopes it will increase property sales overall in 2024/25. The lower rate of 18% for basic rate taxpayers will remain unchanged.

The tax advantages on Furnished Holiday Lets are being removed from 6 April 2025. This unusually gives one year to sort out your affairs if you are planning to either sell or gift your property to take advantage of the business capital gains tax reliefs such as 10% capital gains tax rate; holdover relief on gifts or rollover relief to change to a different business asset investment. We will talk to all our clients with Furnished Holiday Lets in the next couple of months to find out their future plans.

Multiple Dwellings Relief for Stamp Duty Land Tax is being scrapped from 1 Jun 2024 due to abuse from Granny annexes on large residential property purchases. However this could hit agricultural enterprises and smaller student housing purchases to take rates from 1% to 5%!

From 6 April 2025, Agricultural Property Relief from inheritance tax will cover land managed under an environmental agreement with/on behalf of the government & public bodies. Further consultation is ongoing in this area to ensure landowners are not disadvantaged in helping to protect the environment.

From 6 April 2024, Agricultural Property Relief can only be sought on agricultural property within the UK.


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