The budget 2024, Wednesday 6th March 2024, announced a number of changes , some of which impact payroll software, service and professionals in the payment to employees. Speculation in the days leading up to the budget hinted at cuts to Income Tax Rates and alternated cuts to National Insurance contribution rates of up to 2p.
The chancellor announced permanent cuts in taxes to aid economic growth. No solid growth without solid finances.
Within the budget were announced:
National Insurance
The double taxation cut to National Insurance contributions from 6th April 2024 by 2 percentage point from 10% to 8%. This is predicted to add over 200,000 extra people in work.
The lowest effective tax rate since 1978. Making work pay.
The intention is to end this unfair double tax on employment.
Income Tax
The tax rates are partially devolved lived with the personal allowance being uniform across the UK. The rate applicable for England and Northern Ireland are set by the Westminster government. Wales can vary the tax rate but so far have chosen to match the England and Northern Ireland rates. Scotland has the powers to set its own tax bands and tax rates applicable for those who are considered Scotland tax resident.
No changes were announced.
Non-Doms
For resident in the U.K. but not domiciled in the UK. Introduce a new statement, abolishing the current non-dom tax system and replace with a modern residency based system from April 2025. After 4 years there will be a requirement to pay UK taxes. There will be a 2 year transition.
Cost of living measures
For those taking advances loans for those on UC, the Repayment period is to increase from 12 months to 24 months.
Debt relief charge is removed.
Child benefit changes
Plans to end the unfairness of the high benefit charge by making it a household application from April 2026.
From April 2024 the threshold will rise to £60,000 with the higher taper to £80,000.
And what else of interest
Alcohol duty – extension of freeze until February 2025. Backing through great British pub.
Fuel duty – maintain the 5p cut and freeze fuel duty.
VAT registration level increased to £95,000 (from £85,000).
Introduce a brand new British ISA allowing an addition £5,000 allowance in addition to the other ISA allowances.
Vaping duty to be introduced from October 2024 along with increases to Tabasco duties.
PAYadvice.UK 6/3/2024