As expected, nothing to get too excited about from the Spring Budget 2024.
The 2% NI reduction was as expected, but we need to remember this is only for employees paid between £12,571 and £50,270. This reduction is also only 3 months after the 2% deduction in January. Self-employed Class 4 rates were due to decrease from 9% to 8% in April, this will now be reduced to 6%. This does provide people with more money in their pocket that the government requires so we spend more, but we need to remember with salaries increasing and tax thresholds remaining fixed until potentially 2028, more people may go into a higher tax bracket resulting in a higher proportion of income being taxed.
Potential to save NI if paying a bonus in March to defer until April?
No change in dividend allowance which is reduced to £500 (2025). This needs to be reviewed in the not-too-distant future if we want our small businesses to grow and succeed.
I did hear pre-budget that Tax or VAT may be reduced, but no luck there. The VAT registration limit was increased to £90k from £85k. The £85k has been fixed since 2017 so much needed, but in my opinion a minimal late increase. Why not increase to over £100k which some small businesses may not ever want to or be able to achieve?
Glad to see the Child benefit threshold increasing to £60k, so if the highest earning parent is earning under £60k, the full child benefit will be received. I still feel this may not benefit families where one parent is working and one is a stay-at-home parent or earning a minimal wage. Perhaps for married couples, the threshold could be combined therefore £120k where full benefit would still be received. Further details will follow on the revised plans.
More funds are to be provided to the NHS next year and while I believe this is a strong idea and will attract good support leading into the election. I feel the whole NHS system needs an overhaul and as productivity is key, running the NHS like a private company may be necessary, unfortunately.
Let’s see when the Prime Minister calls for the general election, I’m guessing late 2024!
If you have any questions or concerns around these Budget announcements, do get in touch.