As Chancellor Hunt finally stood up in the House Of Commons to reveal the contents of his red box – which we’ve all been hearing and reading rumours about in recent days -the record has now been set straight.
In simple bullet form, here are the news and views of the measures which we picked out as relevant to wealth managers.
In his Budget speech, Chancellor Hunt has revealed the following measures:
- OBR forecasts UK inflation falling below 2% in ‘a few months time’.
- For those on Universal Credit who take out advance loans, the repayment period will be increased from 12 to 24 months.
- Debt relief orders – £90 charge abolished
- Household support charge to be continued for further 6 months
- Alcohol duty freeze extended until Feb 2025
- Fuel duty frozen for a further 12 months
- Borrowing to fall over next five years to 1.2 per cent in 2028-2029 debt falling in line with fiscal rules
- UK has ‘turned the corner on inflation’ and growth has been 1.5% higher than predicted. “We will soon turn the corner on growth’…
- OBR forecasts economic growth in 2024 of 0.8% and 1.9% in 2025 and over 2% in 2026
- Recovery loan scheme extended
- VAT reg threshold increased to £90,000 from April 1st
- Fiscal Headroom for the next govt will be £8.9bn
- New powers to Pensions Regulator and FCA re defined benefits schemes, commitment to pot for life plans to make it easier to take pension pot when switching jobs. Pension funds to report how much they invest in UK assets and international assets separately.
- Proceed with remaining Nat West share sale this summer
- Reform UK ISA system – new British ISA allowing extra £5k investment for new investment in UK assets on top of existing ISA allowances.
- Other measures for certain sectors announced including Clean Energy, Life Sciences, Theatre etc.
- Guaranteeing rates to be paid to childcare providers to encourage 60k parents back into workforce
- Public service spending to increase 1%pa in real terms
- Big investment in IT for public sector, including the health service of £3.5bn
- Build 50 new special free schools
- Reform to Treasury public service investment decisions
- Duty on vaping from Oct 26 and tobacco duty increased then
- Changes to Air passenger duty for people travelling business class
- Holiday lets – as was rumoured – abolished furnished holiday lettings regimes. Multiple dwellings relief to be abolished.
- On property CGT, higher 28% rate reduced to 24% to ‘bring in more revenue’
- Extend sunset on energy profits levy to 2029
- Non Doms – abolish current system for Non Doms and replace with a ‘residency based system’ from April 2025 for first 4 years with tax on worldwide income and gains after 4 years
- HICBC – to consult on a new household based system by 2026. From this April threshold to rise to £6ok plus upper rate will rise to £8ok. Parents would lose £1 for every £2 above £60k. Perhaps this was the “rabbit out of the hat” as was one of the only measures which hadn’t been leaked beforehand.
- NICs cut by 2% as confirmed earlier this morning by Downing Street following a report in The Times on Tuesday – for both employed and self employed individuals. This follows the previous cut to NICs announced in the Autumn Statement.
