What is the Spring Budget?

Each Spring the Chancellor, currently Jeremy Hunt, gives an update on the UK’s economy. He announces policies and measures that are intended to boost the economic landscape over the coming months. This year’s Spring Budget statement was given on March 6th 2024. With the UK plunging into a recession at the end of 2023, and the cost of living crisis still looming over the government, this Budget was extremely important for them to get right.

With a general election within the year, one or two showstopper announcements were expected, to win favour with the electorate. But did the Budget deliver? Here we’ll run through some of the key points from the Spring Statement, including changes to National Insurance and Child Benefit, and help decipher the jargon!

National Insurance

In the Autumn Statement last year, the Chancellor announced cuts to National Insurance. These came into effect in January, saving businesses and employees alike. Cuts to National Insurance for the self-employed will take effect in April. In the Spring Budget, the Chancellor has announced a further 2% cut to National Insurance from April for both the employed and self-employed.

British ISA

The Chancellor announced a new “British ISA”. This will provide the public with an additional £5,000 tax-free allowance. This allowance must be invested solely in the UK.

Child Benefits

Currently child benefit payments reduce for those with children, if one parent earns over £50,000 per year. The Chancellor acknowledged that this is an unfair system. He will enter a consultation to make the benefit apply to household income, not individual income. As a short-term provision, from April 2024, the threshold that determines a reduced Child Benefit will be raised to £60,000.

Vaping

Further announcements made in the Budget include a levy on vaping products. This is on top of the VAT that is already paid on the items. This follows the ban on disposable vapes previously announced, and intends to deter young people from vaping due to the cost.

Fuel Duty

The freeze on fuel duty was due to end at the end of March. There was to be a 5p per litre rise in the cost of fuel, which frustrated drivers. The Chancellor has announced that the intended rise will not go ahead. He has instead continued the fuel duty freeze for another 12 months.

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For those wanting a more in-depth understanding of the announcements, download our Spring Budget Overview, here.

If you have any further questions, please don’t hesitate to contact us.