The Spring Budget 2024 has arrived and we examined the detail to find out what the effects are for employees and employers.
In short, there aren’t many at all. But employees and employers may want to consider acting on the updates to National Insurance, Child Benefit and Air Passenger Duty.
National Insurance cut
The government used the Spring Budget to introduce its headline and fresh cut to employee National Insurance contributions (NICs), after reducing the main rate from 12% to 10% in the Autumn Statement 2023.
From 06 April 2024, contingent on the successful (and swift) passage of necessary legislation through Parliament, employees will benefit from another 2% cut—or 2p—bringing the NIC rate down to 8%.
The government is also cutting a further 2p from the main NIC rate for self-employed workers on top of the 1p cut announced in the Autumn Statement 2023.
This means that, from 6 April 2024, the main rate of Class 4 NICs for self-employed workers will now be reduced from 9% to 6%.
Child Benefit thresholds
The government also used the Spring Budget to announce a rise in the threshold for the High Income Child Benefit Charge to £60,000 from April.
The rate of the charge will also be halved so that Child Benefit is not repaid in full until a person earns £80,000.
The government also says that, long term, it aims to replace the current system, which takes into account individual incomes when determining how much Child Benefit a family is entitled to, by April 2026 with one based on the household’s income.
This means that some employees who earn within those brackets may wish to discuss their salaries or pension contributions with management.
Air Passenger Duty rates
One announcement in the Spring Budget that might have flown under your radar is that 2025-26 Air Passenger Duty (APD) rates for those flying premium economy, business and first-class will increase by forecast RPI, as well as further adjusted for recent high inflation to help maintain their real-terms value.
The 2025-26 APD rates for economy passengers will increase in line with forecast RPI, rounded to the nearest pound.
This means a company with an expenses policy that permits flying in any class above economy may want to review that policy in due course.
Please reach out if you have any questions about these changes in this year’s Spring Budget via enquiries@thrivelaw.co.uk.
Disclaimer
Please note this blog is for reference purposes only and is only accurate at which the date it was published. It does not constitute legal advice and should not be relied upon as such. Specific Legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any actions. Please contact us if you have any questions on enquiries@thrivelaw.co.uk.
