UK Spring Budget 2024: Impact on Your Finances

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The UK Chancellor, Jeremy Hunt, has unveiled the Spring Budget, likely the final significant fiscal event before the upcoming general election. Emphasizing “more investment, more jobs, and lower taxes,” Hunt’s budget focuses on tax cuts to alleviate the burden on individuals and stimulate long-term economic growth. Key measures include reductions in National Insurance (NI), the introduction of a UK Individual Savings Account (ISA), and the phasing out of the UK “non-dom” tax system.

Class 1 National Insurance contributions will decrease from 10 percent to eight percent starting April 6, 2024. The requirement to pay Class 2 National Insurance Contributions will be removed, with consultations on abolishing it entirely later in 2024.

Employees earning above £50,268 will save £754 annually in NI contributions. Abolition of Non-Dom Tax Status: From April 6, 2025, the current taxation basis for UK resident non-domiciled individuals will be replaced by a new regime. Eligible individuals won’t pay tax on foreign income or gains for the first four tax years of UK residency. Transitional Arrangements for Existing Non-Doms: Non-doms losing access to the remittance basis in 2025 will receive a single-tax-year exemption.

As the political landscape may shift after the upcoming election, diversifying wealth structures remains crucial for individuals navigating changing financial regulations.