Yesterday’s Spring Budget announcements were no ‘big reveal’ as most of the measures had already been released to the media before the Chancellor’s speech.

But at least we’re now clearer on what these changes are.

Here, I give a rundown of the main tax announcements and explain what they mean for taxpayers and tax agents…

  • National Insurance contributions (NICs): A cut to the main rate of Class 1 employee NICs from 10% to 8% from‌‌‌ ‌‌‌‌April this year, and a further cut of 2p to the main rate of Class 4 self-employed NICs, taking this to 6%. Plus, the Government is to consult on Class 2 NICs abolition later this year.
  • Non-dom tax regime: The current rules for non-UK domiciled individuals to end from April 2025. Under the new system – regardless of where someone is domiciled – anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains, as is the case for other UK residents. (Note: transitional arrangements to be put in place as part of the changes.)
  • Capital gains tax (CGT): The higher rate of CGT on property to be cut from 28% to 24% from April.
  • Furnished holiday lettings (FHL): The FHL tax regime to be abolished from April 2025, meaning short-term and long-term lets will be treated the same for tax purposes.
  • Stamp Duty Land Tax (SDLT): Multiple Dwellings Relief (MDR) – a bulk purchase relief in the SDLT regime in England and Northern Ireland – to be scrapped from June.
  • High Income Child Benefit Charge (HICBC): The threshold for paying back Child Benefit to increase in April from £50,000 to £60,000. And no need to repay the benefit in full until earnings exceed £80,000. Plus, a plan for HICBC to be administered on a household rather than individual basis by April 2026.
  • VAT: The threshold at which small businesses must register to pay VAT to rise from £85,000 to £90,000 from April.
  • ‘Windfall’ tax: Extension of the Energy Profits Levy (EPL) by another year to March 2029.

What the Spring Budget means for taxpayers

The National Insurance cuts had been widely publicised and will be welcomed by many. The other main announcements were about property tax and the taxation of non-domiciled individuals.

For property, it’s a mixed story. The drop in the higher rate of capital gains tax to 24% will compensate slightly for the loss of the furnished holiday lettings regime and Multiple Dwellings Relief.

It’s no surprise the Government is scrapping MDR, as it had become something of a hot potato in the property world. And as the change doesn’t take immediate effect, there will no doubt be a scramble to complete on property transactions while the relief remains in place.

If you’ve relied on the FHL rules for many years, you’ll need to fully understand how the abolition of the regime will affect you. I’d recommend getting advice before the changes come into force.

The big change was the ending of the regime that currently applies to non-domiciled individuals (non-doms). This system has been in place for many years and has been widely used, particularly before the remittance basis charge was implemented. So, if you’ve ever claimed the remittance basis, you’d be wise to keep an eye on how these proposals evolve and potentially take advantage of the opportunity to bring funds into the UK at a preferential tax rate of 12%.

The non-dom changes will affect you if you’re coming to the UK, already here or if you’ve previously used the rules. So, you should get professional advice now to make sure you’re fully prepared.

What the tax changes mean for accountants and tax advisers

There were some major and far-reaching changes unveiled in the Budget, so it’s wise to get up-to-speed with the measures and how they’re likely to impact your clients.

It’s a good idea to let your customers know about the non-dom changes before they take effect, especially those who are currently claiming or have previously claimed the remittance basis. You should stress the importance of getting advice on how the new rules (and in particular, the transitional provisions) will apply to them.

Non-dom is a complex area of taxation and the changes won’t immediately simplify matters. And that’s why you should encourage your clients to get advice while they have a window of opportunity to take relevant steps.

Similarly, if any of your clients have relied on the furnished holiday lettings rules, you should make them aware of what the changes mean for them. They can then make an informed choice as to whether they continue with their business when the new measures take effect.

Need help understanding what the Spring Budget means for you?

Chat to our team of friendly tax specialists on 07813 434195 or email stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation