The UK Government has announced a number of tax measures in today’s UK Spring Budget. There were no major surprises, particular as some of these developments had been trailed in recent days.
As many commentators have highlighted, this is a pre-election Budget, which has no doubt contributed to the move to further reduce NICs (following a similar reduction in the Autumn Statement 2023), combined with (and presumably in part funded by) the abolition of the ‘non-dom’ tax regime.
Away from the tax measures, the Chancellor made encouraging remarks in support of the UK tech sector, in particular looking to facilitate more investment from pension funds.
Here are five key tax highlights:
- National Insurance Contributions (“NICs”): The main rate of Class 1 NICs is to be reduced from 10% to 8%, and the main rate of Class 4 self-employed NICs is to be reduced from 8% to 6%, from 6 April 2024.
- ‘Non-Dom’ tax regime: The remittance basis of taxation will be abolished for non-UK domiciled individuals, from 6 April 2025, and replaced with a new regime under which individuals who become UK tax resident after a period of ten tax years of non-UK residence will not pay tax on foreign income and gains arising in the first four years after becoming UK tax resident.
- Energy Profits Levy (“EPL”): The EPL is being extended to 31 March 2029. The Government will also legislate to abolish the EPL if prices return to their historic norm for a sustained period of time.
- UK ISA: The Government is launching a new individual savings account (“ISA”), with an allowance of £5,000, and a focus on UK investments. A consultation on the design and implementation of the UK ISA runs from 6 March 2024 to 6 June 2024.
- Capital Gains Tax (“CGT”): The higher rate of CGT on residential property disposals will be reduced from 28% to 24%, from 6 April 2024.
