Here are the latest points from this year’s spring budget summary, this will likely be the last report before the next general election. Here we will be covering topics including tax and income support, transport and energy, housing, inflation, and business and investments.
Tax and income support
- For employees and the self-employed 2p per pound will be cut from National Insurance tax collection.
- The UK’s non-dom tax regime, applicable to residents with permanent homes overseas, will be replaced by new regulations starting in April 2025.
- Household eligibility for full child benefits will extend to those where the highest-earning parent earns up to £60,000, up from the current limit of £50,000.
- Partial child benefits will be available to households where the highest earner earns up to £80,000.
- Individual savers will enjoy a £5,000 tax budget allowance under the “British ISA” scheme to invest in UK-listed companies.
- Emergency budgeting loans for individuals on benefits will have an extended repayment period.
- The £90 fee for obtaining a debt relief order will be eliminated.
- The government’s support fund for individuals facing challenges with the cost of living will be extended for an additional six months.
Cigarettes, vapes, and alcohol
- The freeze on alcohol duty, initially set to conclude in August, will now persist until February 2025.
- A tax on vaping products will commence in October 2026 after undergoing a consultation process.
- The current tobacco tax will see an increase to uphold the “financial incentive to choose vaping over smoking.”
Transport and Energy
- Fuel duty remains frozen. The 5p reduction in fuel duty on petrol and diesel, originally set to expire later this month, has been extended for another year.
- The UK government secures a £160 million agreement to acquire the site of the proposed Wylfa nuclear facility in North Wales.
- The “windfall” tax on energy firms’ profits, previously slated to conclude in March 2028, has been prolonged until 2029.
- Air passenger duty, the tax levied on flights, will increase for business class tickets.
Housing
- The tax rate on profits from property sales has been reduced from 28% to 24%.
- Tax incentives for owners of holiday rental properties have been eliminated.
Public debt, Inflation, and the economy
- Forecasts by the Office for Budget Responsibility anticipate a 0.8% growth in the UK economy for the current year, followed by a projected 1.9% growth for the subsequent year (2025).
- Anticipated growth rates include 2% for the year 2026, 1.8% for 2027, and 1.7% for 2028.
- The UK’s inflation rate is predicted to dip below the 2% target within a few months.
- Projections suggest that underlying debt, excluding Bank of England debt, will reach 91.7% of GDP this year, climbing to 92.8% the following year.
- Overall day-to-day government expenditure is expected to increase by 1% in real terms over the coming five years.
Business and investment
- The threshold for small businesses required to register for VAT increased from £85,000 to £90,000 effective from April.
- Permanent extension of tax reliefs for touring and orchestral productions, initially slated to conclude in March 2025.
- Extension of the Covid-era government loan scheme for small businesses until March 2026.
Further measures
- The threshold for small businesses required to register for VAT increased from £85,000 to £90,000 effective from April.
- Permanent extension of tax reliefs for touring and orchestral productions, initially slated to conclude in March 2025.
- Extension of the Covid-era government loan scheme for small businesses until March 2026.
Thank you for reading. All information sourced from BBC.
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