Courtiers Wealth Management
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Changes, cuts and scraps; our thoughts on the Spring Budget, 2024

Changes, cuts and scraps; our thoughts on the Spring Budget, 2024

Private Client Team

Lloyd Mashatise
James Dickens
Lloyd Mashatise and James Dickens,
Private Client Advisers

Similar to the Autumn Statement, the driving point from Jeremy Hunt was growth mainly through increasing disposable income and increasing investment in British businesses with a heavy focus on innovation. Some of these changes were already anticipated.

The biggest takeaways for us and for private clients were the National Insurance reduction, the new ‘British ISA’ and a reduction in residential property capital gains tax.

National Insurance Reduction:

Jeremy Hunt announced a further 2% cut in National Insurance (NI) following a 2% cut in the Autumn Statement. This means that for those still working and paying NI there will be a further average increase of £450 per year in income. This is expected to encourage about 100,000 people to join the workforce.

National Insurance reducing by another 2p means that for employees, it will drop from 10% to 8%, and for those who are self-employed, it will drop from 8% to 6%. While the aim is a much simpler tax system, for our affected clients, they will gain extra money to either save, spend or invest.

The British ISA:

A new British ISA will give individuals an additional £5,000 allowance on top of the existing £20,000 ISA allowance. However, it is limited to investments in British companies, with the goal to aid domestic growth.

This could offer clients a different planning avenue as ISAs are favourable tax wrappers by nature. This could also be a welcome development considering the reduction and subsequent removal of Capital Gains Allowances (see more below). There is also potential for diversification and exposure to the UK market, which has recently been neglected by investors. Courtiers are well positioned here with a range of risk managed and UCIT funds – particularly our UK Equity Income fund.

This is an exciting opportunity for Courtiers clients as it offers another tax-efficient investment vehicle with an aim of boosting UK equity market and UK businesses. It will be interesting to see if the British ISA or BRISA as a separate product in its own right, will have the added benefit of boosting investment in the UK.

Child Benefit Changes:

Full child benefits will now be paid to households where the highest earning parent earns up to £60,000 – this is a change from £50,000. Tapering of partial child benefit is now £80,000 – up from £60,000.

Residential Property Capital Gains Tax:

This change was not anticipated and might have caught a lot of people by surprise. The higher rate of Capital Gains Tax (CGT) on residential property will be reduced from 28% to 24%. This could be beneficial for clients looking to streamline their affairs or maybe move to a smaller property as they will save 4% on gains that take them into the higher rate tax bracket.

This change in Capital Gains Tax will benefit Courtiers clients who are looking to streamline their property portfolio. It will also benefit those looking to buy property as it may persuade reluctant potential sellers to finally sell their asset.

As the saying goes; the devil is in the detail so we will eagerly await and follow up with a more detailed analysis.

Corporate Services Team

Alex McLoughlinAlex McLoughlin, Corporate Client Adviser

This Budget had a lot of anticipation considering it will be the final Budget before the upcoming general election later in the year.

The headline measure announced (which was expected ahead of the Budget), was the reduction in National Insurance Contributions (NICs). From 6th April, there will be a reduction in Class 1 NICs from 10% to 8% for employees and a reduction in Class 4 NICs for the self-employed, from 8% to 6%, which both follow on from initial reductions announced by the Chancellor in the Autumn Statement last year.

This is a welcomed change, putting money back in working people’s pockets, during a challenging economic period of persistently high inflation and higher interest rates. Interestingly, the Chancellor chose to reduce National Insurance rather than the headline rate of income tax, as it is a cheaper way to fund the cuts. However, those enjoying retirement and receiving pension income will not benefit as they do not pay National Insurance contributions.

This Budget was positive for working families, with the Chancellor announcing positive changes to the High-Income Child Benefit Charge to help families and encourage more people back into work. Recognising that it is unfair for a single family member of a household who currently earns £60,000 a year (or more) to have to repay the child benefit in full, the Chancellor announced some immediate help. He did this by increasing the lower income threshold (the level at which Child Benefit starts to be repaid) from £50,000 to £60,000 and increasing the upper income threshold to £80,000 from £60,000.

This means that if one member of a household earns £80,000 or more, the full amount of Child Benefit will have to be repaid. Anyone with earnings in between will only have to repay some of the Child Benefit on a tapered scale. Additionally, the Chancellor announced that a consultation will be carried out to review whether Child Benefit should be assessed on a household basis, rather than individually, to make the assessment fairer. They plan to do this by April 2026.

The Chancellor was not shy in championing his Budget as a continuation of the Conservative Government’s long-term growth and investment plan. It was officially announced that there would be a new UK ISA with a £5,000 annual allowance, in addition to the existing £20,000 annual ISA allowance, permitting investment specifically in UK listed equities. This will open further investment and tax planning opportunities for individuals.

In addition, for those individuals who are more cautious in nature, there will also be a new British Savings Bond, provided by NS&I and offering savers a guaranteed rate over three years.

Investment Team

Gary Reynolds, Chief Investment Officer

If the test of a good Budget is one that doesn’t send UK long term interest rates flying and British Government Bond prices crashing, which was what Truss and Kwarteng accomplished in their now notorious Autumn Budget of 2022, then this was a good Budget.

Long term interest rates flickered as the Chancellor broadcast his amendments and by mid-afternoon were a little lower than immediately before he started his speech. The FTSE 100, representing the share prices of the largest quoted companies in Britain, nudged a little higher meaning that the Prime Minister and Chancellor had achieved the first rule of any Budget i.e. “DON’T CRASH THE MARKETS”.

Still mindful of the lessons from 18 months ago when Liz Truss and Kwasi Kwarteng ignored the Office for Budget Responsibility (OBR), Jeremy Hunt had clearly done his homework and made constant reference to the OBR’s new forecasts, based on his Budget, which were published immediately after he concluded his speech. Under the updated OBR forecasts, inflation would drop below 2% per annum later this year and economic growth for 2024 and 2025 would be 0.8% and 1.9% respectively. This is moderately good news, but probably not good enough to keep the Prime Minister and Chancellor in office after the next General Election.

Those of you that place more store on the change in real GDP per person rather than a national overall figure (and you would be right to do so) may care to take a look at page 35 of the OBR’s latest forecast where paragraph 2.25 points out that “Real GDP per person has fallen continuously since the first quarter of 2022 (the longest sustained decline since records began in 1955) and fell by 0.7% in 2023.” That is indicative of decades-long underinvestment in the UK. Small wonder that Jeremy Hunt has committed to funding the NHS productivity plan in full and is throwing hundreds of millions of pounds into technology and the digitisation of records and processes to push up public sector productivity. He may succeed but I doubt he’ll be in power to reap the benefits.

This Spring Budget was meticulously managed with the Prime Minister and Chancellor avoiding the fiasco of their predecessors from 18 months earlier. Whichever party is in power at the next Budget I expect much of the same – careful consultation with the OBR with the economic consequences of any changes to taxation and fiscal policy studiously and carefully considered before they are announced.

Future Chancellors take note: if you crash the markets, they will crash you!

A comprehensive summary of the Spring Budget will be published tomorrow.

View the full Spring Budget on

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