Chancellor Jeremy Hunt presented his highly-anticipated Spring Budget on 6th March 2024, with the UK's inflation rate forecast to fall below 2% target by the end of June.

We have taken the main points from the Spring Statement, and have outlined these below:

Inflation and the Economy

• UK's inflation rate forecast to fall below the government's 2% target by the end of June
• Office for Budget Responsibility predicts the UK economy to grow by 0.8% this year and 1.9% next year
• Looking beyond, the UK Economy is predicted to grow 2% in 2026, 1.8% in 2027 and 1.7% in 2028
• Public debt, excluding Bank of England debt, is forecast to be 91.7% of GDP this year, rising to 92.8% next year

Taxation

• National Insurance cut by 2 percent in the pound for employees and the self-employed, with the Chancellor estimating that this is worth around £450 per year to an employee on an average salary of £35,000.
• £5,000 UK Individual Savings Account (ISA) tax allowance for savers investing in ‘UK-focused’ shares to be set up following a consultation

Benefits and Income Support 

• The High Income Child Benefit Charge, which affects payments if one parent earns above £50,000 a year, is to move to a household based system – the threshold will rise to £60,000 from April in the meantime
• Partial Child Benefit to be paid where the highest earner earns up to £80,000 
• Longer repayment period for people on benefits taking out emergency budgeting loans from the government
• Government fund for people struggling with cost of living pressures to continue for another six months 
• £90 admin fee to obtain a debt relief order scrapped

Business and Investment 

• Threshold at which small businesses must register to pay VAT raised from £85,000 to £90,000 from April
• Covid-era government loan scheme for small businesses extended until March 2026

Housing

• Higher rate of tax paid on profits from selling property cut from 28% to 24%
• Tax breaks for owners of holiday let properties scrapped
• Stamp duty tax break when purchasing multiple properties in England or Northern Ireland to end in June

Transport and Energy

• Fuel duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year
• Windfall’ tax on the profits of energy firms, which had been scheduled to end in March 2028, extended until 2029
• Air passenger duty - the tax paid on flights - to increase for business class tickets

Cigarettes, Vapes & Alcohol 

• Freeze on alcohol duty, which had been due to end in August, to continue until February 2025, benefitting 38,000 pubs across the UK
• New tax on vaping products from October 2026, linked to the levels of nicotine
• Tobacco duty to go up £2.00 per 100 cigarettes at the same time to ensure vaping remains cheaper

Saving

• To help people save, a new British Savings Bond, delivered through NS&I, will offer a guaranteed rate and fixed for three years

You can find the full Statement on the Government's website by clicking here.

How We Can Help

If you think that your current retirement plans, pensions, long-term investments or overall financial position will be impacted by the changes outlined in the statement, then please do get in touch with your advisor here, call us on 0141 572 1340 or email us at enquiries@mccreafs.co.uk. 

McCrea Financial Services is Authorised and Regulated by the Financial Conduct Authority. 

Source: BBC News & One Four Nine Group