It's always important to stay updated on the latest changes in the country's economic policies, especially when it comes to your financial planning. The Spring Budget 2024, presented by Chancellor Jeremy Hunt, has brought about some significant changes ...
- National Insurance Changes
The Government is further reducing the main rate of employee National Insurance from 10% to 8%, after already making a 2% cut in January of this year. For those who are self-employed, the rate of National Insurance is reduced from 9% to 6%.
So, what does this mean? Ultimately, it means that if you are still working, you will receive more income in your wallet from your pay packet! This will help ease some of the cost of living burden on UK households, and for those who already have sufficient disposable income, this provides some extra funds from which they can put into their Pensions to grow over time.
- Tax on Property Gains
The Chancellor has reduced the rate of Capital Gains Tax that is payable when properties are sold by somebody who is a higher or additional rate taxpayer.
When a person sells their home, they are not liable to pay any Capital Gains Tax unless it is a rental property or additional residence. CGT is payable on the gain that a person makes on the property, and the basic rate is currently 18% which will not change. For those who pay higher or additional rate of Income Tax, this rate will be reduced from 28% to 24%.
For those who are planning to sell properties in the near future, this reduced rate of tax will mean that you will be able to keep more of your gains. However, it is important to bear in mind that the annual exempt amount for CGT is about to be reduced to £3,000 - this is the amount of gain you can make in a Tax Year without having to pay CGT.
- Child Benefit Threshold Increase
The Government is increasing the income threshold at which a person loses their eligibility for Child Benefit. Currently, you start to lose some of your Child Benefit entitlement when you earn over £50,000, but this is increasing to £60,000. This means that going forward, a parent would need to earn over £80,000 per annum to lose their Child Benefit completely.
A higher proportion of parents will be able to receive Child Benefit, which can be used to save towards their children's futures. Have you considered starting a Junior ISA for your child, or speaking to friends and family who have children about exploring this option? It is a fantastic way to put any additional Child Benefit to use and allow it to grow for the future. Speak with us if you'd like to find out more!
- The New British ISA
The Government has announced that it plans to launch a brand new UK ISA. This new style of ISA will be focused around investing into UK-focused assets, designed to help UK businesses to grow.
To incentivise investors to consider this new ISA, it will have a subscription limit of £5,000 which will be in addition to the current standard ISA subscription limit of £20,000. The beneficial part of this is that saving in an ISA is tax-free - meaning that you can withdraw your funds in the future without having to pay any tax on the growth.
Details of this new ISA are still not confirmed, with this product not yet launching to the public and further details being ironed out. With any investment ISA, it is crucial that you consider the right level of investment risk for your experience, needs, and objectives for the money.
From changes in taxation to savings and investments, it is important to stay updated and make necessary adjustments to your budget accordingly. As always, seek professional financial advice to ensure your financial planning aligns with your long-term goals and objectives.
If anything I've written in this blog post resonates with you, it may be a great idea to give me a call on 07887 832222 and let's see how I can help you.