The Spring Budget of 6 March 2024 was Jeremy Hunt's final Budget before the general election that took place on 4 July 2024. It contained the second consecutive cut in the main rate of employee National Insurance, the first increase in the VAT registration threshold in seven years, the abolition of the resident non-domiciled tax regime, and a meaningful reform to the high-income child benefit charge. Several measures were politically framed for the election but some were structurally significant for SME and personal tax planning.
National Insurance cut to 8%
The main rate of Class 1 employee National Insurance was cut from 10% to 8% from 6 April 2024, following the January 2024 cut from 12% to 10%. The cumulative effect was a four percentage point reduction in the rate over a five-month period. For Class 4 self-employed contributions, the main rate was cut from 9% to 6% from April 2024 (after the previously announced cut from 9% to 8%), a three percentage point net reduction.
For employees, the cumulative cut was worth approximately £900 per year on a £50,000 salary. For director-shareholders drawing modest salaries, the cut was less material in cash terms but shifted the optimal salary point slightly upward. We updated every director remuneration model in our portfolio in the weeks following the Budget.
VAT registration threshold to £90,000
The VAT registration threshold rose from £85,000 to £90,000 from 1 April 2024 — the first uplift since April 2017, after seven consecutive years of freeze. The deregistration threshold rose from £83,000 to £88,000 on the same date. For small businesses sitting just under the £85,000 line through the freeze period, the £5,000 uplift created a useful planning window. The rolling 12-month test continued to apply.
For B2C service businesses deliberately managing turnover below the threshold, the new £90,000 ceiling extended the runway. For businesses already above £85,000 but below £90,000, the change opened the possibility of deregistration — although this required careful analysis of input VAT recovery, capital goods scheme implications, and customer expectations. Our VAT team ran deregistration assessments for several clients in the months following the announcement.
The non-dom regime abolished
The most surprising announcement was the abolition of the resident non-domiciled tax regime with effect from 6 April 2025. The remittance basis for non-doms — under which UK residents who were not UK domiciled could elect to be taxed only on UK income and on foreign income remitted to the UK — was to be replaced with a new four-year foreign income and gains regime for arrivers who had been non-UK resident for at least ten consecutive years. After four years, full UK taxation on worldwide income and gains would apply.
Transitional reliefs were announced, including a 50% reduction in the foreign income subject to UK tax in 2025-26 for existing non-doms, and a Temporary Repatriation Facility allowing pre-6 April 2025 foreign income and gains to be brought to the UK at a 12% tax rate. Inheritance tax was to move from a domicile-based system to a residence-based system from April 2025.
For our Canary Wharf clients with international family structures and our Dubai-based clients with UK ties, the announcement triggered immediate planning conversations. Several measures in the original package were modified or expanded in the subsequent Autumn Budget of 30 October 2024 once the Labour government took office, particularly the inheritance tax residence test details.
High-income child benefit charge raised
The high-income child benefit charge threshold was raised from £50,000 to £60,000 from April 2024, with full withdrawal extended from £60,000 to £80,000. The longstanding £50,000 threshold — frozen since the charge was introduced in 2013 — had become punishing for middle-income earners and was widely criticised. The £60,000 to £80,000 taper produced a more gradual withdrawal and a household-income-based reform was promised for April 2026, although it was subsequently dropped.
For director-shareholders managing total remuneration around the threshold, the change opened legitimate room to draw additional dividend income without triggering the charge. We updated planning models for several family company clients within days of the announcement.
Furnished Holiday Let regime abolished
The Furnished Holiday Let (FHL) tax regime — which had given holiday rental properties capital allowances, more generous pension contribution treatment, and beneficial CGT treatment — was abolished from 6 April 2025. For clients with significant FHL portfolios, the change was material and triggered a wave of disposal planning, partnership restructuring, and capital allowance crystallisation in the year leading up to abolition.
Capital gains tax on residential property cut
The higher rate of capital gains tax on residential property (other than the main home) was cut from 28% to 24% from 6 April 2024. The 18% basic rate band was unchanged. This was the only headline CGT rate movement in the Budget and was framed as a measure to encourage landlord disposals.
The verdict
The Spring Budget of 2024 was the most consequential personal tax Budget of the cycle — even though it was overshadowed by the election that followed four months later. The NIC cuts, VAT threshold uplift, and high-income child benefit charge reform were all genuinely useful for SME directors. The non-dom abolition was a policy reversal that has continued to shape international planning conversations in the years since.
If you have international ties or are reviewing your remuneration mix in light of the cumulative NIC changes, contact our team and we will run a structured review.