Yesterday, the Chancellor, Jeremy Hunt, delivered his Spring Budget. Let’s have a look at the key points from the measures given, including growth of the economy, the fall of inflation and the changes in non-dom tax status.
What he said about the Economy
Jeremy Hunt started delivering his budget talking about the state of the British economy, dealing with the financial crisis, the pandemic and the energy crisis. He expects the economy to grow by 0.8% this year and 1.9% in 2025. Inflation is expected to fall below the government’s 2% target in just a few months time according to Hunt, down from 4% in January.
VAT, Tax and National Insurance
National insurance rates will be cut again for both the self-employed and employees. Hunt confirmed that the national insurance contribution rate will be cut from 10% to 8% of pay from April. This comes on top of a 2p cut in the autumn statement in November, which reduced the rate from 12% to 10%.
The Chancellor said he plans to allow full expensing to apply to leased assets. Full expensing allows businesses to offset investment in items such as new factory machinery and IT equipment against tax. He also announced that the VAT registration threshold will be increased from £85,000 to £90,000 from the start of April. Hunt stated it would help “tens of thousands of businesses”.
Non-Dom Tax Status and Property Tax
During his budget, the chancellor confirmed the government will abolish the non-dom tax status and it will be replaced by a “modern, simpler and fairer” system from April 2025. The status is used by people who are resident in the UK, but who have certain overseas links and are not domiciled in the UK for tax purposes as they only pay UK tax on money made in the country, but not on any world wide income.
Jeremy Hunt said the government will reduce the high rate of property capital gains tax from 28% to 24%. He also announced the abolition of stamp duty relief for those buying more than one dwelling.
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