From Headlines From Clear Law…

In today’s news, I bring to you that:

1. Jeremy Hunt unveils £10bn national insurance cut in pre-election

2. Budget, the budget 2024: key points at a glance;

3. VAT threshold raised to boost smaller firms;

4. UK announces record support for renewables;

Jeremy Hunt unveils £10bn national insurance cut in pre-election Budget

UK Chancellor Jeremy Hunt placed a £10bn cut in national insurance at the heart of a budget designed to chip away at Labour’s polling lead while leaving the door open for more tax reductions before an autumn election.

Most Conservative MPs welcomed the cut in national insurance rate from 10p to 8p, which repeated a 2p cut in the Autumn Statement, The combined effect of a 4p cut is worth an average of £900 to 27mn workers.

OBR forecasts show that the UK’s tax burden is still climbing - largely due to previously announced freezes to tax thresholds at the time of high inflation. Tax as a share of GDP would rise to 37.1% in 2028-2029, the highest level since 1948.

FTSE 250 Index rose by 1.4% - after Hunt said that a new British Isa would allow an additional £5000 annual investment for UK equities.

Budget 2024: Key Points at a glance

National Insurance: Hunt confirms that the national insurance contributions rate will be cut from 10% to 8% of pay from April.

Growth: the economy is expected to grow by 0.8% this year and 1.9% in 2025.

Inflation: Inflation is expected to fall below the government’s 2% target in “just a few months’ time”, Hunt says, down from 4% in January.

Government borrowing: Hunt says underlying debt, which excludes Bank of England debt, will be 91.7% of GDP in 2024-2025 according to the OBR, then 92.8%, 93.2%, and 93.2% before falling to 92.9%. Borrowing falls from 4.2% of GDP in 2023-24, to 3.1%, 2.7%, 2.3%, 1.6% and 1.2% in 2028-2029.

NHS: Hunt announces a “landmark public sector productivity plan” will be published, including cutting from filling by doctors using AI, digitising hospital processes and improving NHS app.

Child benefit: Hunt announces the consultation on child benefit rules, to apply it to collective household incomes rather than for individuals from April 2026. He says the threshold will be for a high-income tax charge on the benefit will be raised from £50,000 to £60,000. The top of the taper to withdraw the benefit will be raised to £80,000 from £60,000.

Childcare: Hunt says rates paid to nurseries to fund free childcare hours for parents of children aged more than 9 months will continue for the next 2 years. However, these have become worth less to nurseries in recent years as inflation has risen sharply.

Property Tax: The government will reduce the higher rate of property capital gains tax from 28% to 24%. Also, to abolish stamp duty relief for those buying more than one dwelling.

Savings: British Isa, giving investors a £5,000 extra tax-free allowance to “encourage more people to invest in the UK assets”.

VAT threshold raised to boost smaller firms

Small business owners and the self-employed will no longer have to charge 20% VAT from April. The Chancellor raised the turnover threshold at which businesses have to register to pay VAT from £85,000 to £90,000.

UK announces record support for renewables

The next UK renewable energy auction will offer a record £1bn annual subsidy. However, it received criticism from some Scottish Tories for extending the windfall tax for oil and gas producers.

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