The eagerly awaited UK Spring Budget 2024 was unveiled yesterday. Although there wasn’t a whole lot for HR and business leaders to take away from the Chancellor’s announcement this year, it’s clear that a few of the updates will make a positive impact on both employees and businesses alike.
Here’s an overview of what you need to know.
To help alleviate some of the effects of the cost-of-living crisis, the Chancellor confirmed that from 6th April 2024, Class 1 employees’ National Insurance rates will be cut once again by 2p to fall from 10% to 8%. This follows the 2p cut that already came into effect from 6th January this year and means that the average UK employee will save around £450 per year.
Employers will therefore need to ensure that their HR and/or payroll systems are updated to reflect this NI change in time for 6th April (the first day of the 2024/25 tax year) to continue paying their employees correctly.
For the self-employed, Class 4 NI rates will also be cut from 9% to 6% – which for the average self-employed person on £28,000 per year will reflect an annual saving of around £650.
Another Spring Budget update that will be sure to go down well with many employees, is the increase in support for working parents. From April 2024, the threshold for parents paying the high-income child benefit charge will be raised from £50,000 to £60,000.
The charge will be 1% of the Child Benefit for every £200 of income that exceeds £60,000 and will equal the payment for income that exceeds £80,000.
What’s more, from September 2025, 30 hours of free childcare per week for all children under five years old will be introduced – expanding on the existing support of 30 hours of free childcare for three and four-year-olds from September 2024, and 15 hours per week for two-year-olds from April 2024.
To be eligible for this benefit, parents must individually earn less than £100,000.
Positive news for small business owners now: an increase in the VAT threshold. From 1st April 2024, the VAT registration limit will be increased from £80,000 to £90,000.
This is the first increase in seven years and is due to make around 28,000 small businesses exempt from paying VAT – enabling them to invest in growth.
In addition, the existing Recovery Loan Scheme – designed to support access to finance for UK businesses – will be renamed the ‘Growth Guarantee Fund’ and have an extension of £200 million, helping around 11,000 SMEs.
UK Government pension schemes will have to publicly disclose the breakdown of their asset allocations, including both UK and international equities. The government is also set to make it easier for pension funds to invest in UK assets, to support UK entrepreneurs staying onshore.
If your organisation could benefit from additional HR or payroll support following the changes announced in the UK Spring Budget 2024, our people professionals are here to help. Get in contact with us today.
