Spring budget 2024: four key announcements
In the recent Spring Budget, Jeremy Hunt unveiled measures to address the cost-of-living crisis, as well as tax cuts for working parents, offering a beacon of hope for individuals and businesses alike.
With reductions in National Insurance contributions and extended support funds, the budget aims to lighten financial burdens and extend a helping hand to those in need. Investments in the NHS signal a commitment to improving healthcare services, while tax breaks and incentives aim to breathe new life into key industries.
Join us, as we provide four key announcements from the budget and our insights on how businesses can make the most of these changes.
Tax cuts for working families
One of the headline announcements is the significant reduction in National Insurance contributions for both employees and the self-employed. Starting from 6th April 2024, employees will see their NI contributions drop another 2%, so for those currently paying 10% this would reduce to 8%, putting up to an extra £450 annually into the pockets of the average worker. Combined with previous cuts, this means a possible boost of over £900 per year for working individuals. Additionally, the self-employed will benefit from a reduction in the main rate of Class 4.
Easing the cost of living
Acknowledging the challenges faced by many households in covering basic needs, the government has extended the Household Support Fund, injecting an additional £500 million to assist vulnerable families with the rising cost of living. This fund, available through local councils, offer crucial support with essential costs like energy bills, food, and other necessities.
Supporting working parents
In a move to level the playing field for single-earner households, the budget introduces reforms to child benefit eligibility, transitioning to a household-based system by 2026. To provide immediate relief, the threshold for the High-Income Child Benefit Charge will be raised from £50,000 to £60,000, with halving of the rate up to £80,000. These changes are expected to benefit families across the income spectrum, offering much needed support to working parents.
Investment and growth
With an eye on positioning the UK as a global leader in high-growth industries, the budget introduces range of tax breaks and incentives. Over £1 billion will be directed towards bolstering the creative industries, while measures such as investment zones and growth guarantees aims to spur innovation and job creation across various sectors. Additionally, small, and medium-sized businesses stand to benefit from a £200 million extension of the Growth Guarantee Scheme, facilitating access to finance and fostering growth opportunities.
What’s next?
As the dust settles on this year’s Spring Budget, it’s clear that embracing flexibility in how we work will be essential for businesses to thrive in 2024. By creating environments and accommodating the diverse needs of our workforce, we can unlock the full potential of these budget reforms, fostering growth and prosperity for all.
In the coming months, we’ll dive deeper into the impacts of these changes, offering insights for businesses. Keep an eye out for our updates and expert advice, and check out our most recent Payroll legislation guide for more information.
