INTRODUCTION

With the UK entering a technical recession at the end of 2023 and a general election on the cards this year, Chancellor Jeremy Hunt was under pressure to deliver a Spring Budget that demonstrated fiscal responsibility and generosity.

Dubbing the fiscal statement a ‘Budget for long-term growth”, Hunt focused his speech on delivering tax breaks, boosting investment and tackling unfairness in the UK tax system.

One of the Chancellor’s most significant announcements was a 2p cut to National Insurance contributions (NICs) in April, on top of the 2p he already cut in last year’s Autumn Statement. Workers will see their NIC rates fall by four percentage points in less than six months.

Other personal measures included extending the freeze and 5p cut on fuel duty for a further 12 months, cutting the higher capital gains tax (CGT) rate on residential property sales, and reforming the high income child benefit charge (HICBC) to increase the threshold and make the system fairer for single-earner households.

For businesses, Hunt promised enhanced funding for ‘high-growth industries’ and focused support for the creative sector. The VAT threshold will also rise from £85,000 to £90,000 in April, reducing the administrative burden for tens of thousands of businesses.

To pay for these changes, the Chancellor announced several revenue-raising initiatives, such as replacing the current tax regime for non-domiciled individuals (non-doms), a new levy on vaping products and an extension of the windfall tax levy on oil and gas companies. Hunt also abolished the furnished holiday lettings relief, claiming this move would raise capital and improve the availability of long-term rental properties.

This report outlines the major announcements in the Chancellor’s speech, breaking down the latest economic forecast from the Office for Budget Responsibility (OBR) and what the changes could mean for businesses and individuals alike.

Download a full copy of the report here.