2% reduction in National insurance Contributions 

Further to the reduction in National Insurance Contributions (NIC) in last year’s Autumn Budget, a further reduction was announced:-
  • Class 1 (primary) rate of NIC for employees – reduced from 10% to 8% with effect from 6 April 2024
  • Class 4 NIC for the self-employed, reduced from 8% to 6% from 6 April 2024

VAT registration threshold to increase 

From 1 April 2024, the threshold at which a business must register for VAT has increased from £ 85,000 to £ 90,000 (the first increase since 2017). The deregistration threshold will be set at £ 88,000 (increased from £ 83,000).

Capital Gains Tax for landlords cut by 4%

The highest rate for Capital Gains Tax (CGT) for landlords and ‘second home’ owners (currently 28%) is to be reduced to 24% with effect from the tax year 2024/25.
The basic rate of CGT for selling this type of asset remains 18%.

High Income Child Benefit Charge

Currently, child benefit is clawed back where one partner’s income is more than £ 50,000 (and fully clawed back where income reaches £ 60,000). This means that both partners can earn £ 49,000 (or household income of £ 98,000) and still receive the full child benefit. Whereas if one partner earns £ 60,000, the full child benefit is clawed back.

A new household income system will be introduced from April 2026. In the meantime, from 6 April 2024 the threshold will be changed so that child benefit will not be clawed back until one partner’s income reaches £ 60,000 and not fully withdrawn until income reaches £ 80,000.

Furnished Holiday Lettings (FHL) regime abolished

The FHL regime will be abolished from April 2025, meaning short-term and long-term lets will be treated the same for tax purposes. Individuals with FHL and non-FHL properties will no longer need to calculate and report income separately.

Other announcements

  • No changes to income tax bands or rates in 2024/25
  • Dividend allowance reduces from £ 1,000 to £ 500 in 2024/25
  • No change to National Insurance thresholds or limits in 2024/25
  • No change to employer’s NIC (secondary) rates in 2024/25
  • CGT annual exempt amount reduces from £ 6,000 to £ 3,000 in 2024/25
  • No change to IHT limits or rates in 2024/25
  • No change to corporation tax thresholds or rates in 2024/25
  • New British ISA with additional £ 5,000 per annum limit for investing in UK assets
  • Extension to various cultural reliefs such as Audio-Visual Expenditure Credit, Theatre Tax Relief and a new Independent Film Tax Relief
  • SDLT multiple dwellings relief to be abolished