Measures aimed at enhancing NHS productivity were key public spending announcements in the Chancellor’s Budget speech.
In this election year, the speech also contained promises of future tax cuts, although the actual measures announced were relatively modest. There was the anticipated further cut to National Insurance alongside a reduction to the top rate of Capital Gains Tax on residential properties, as well as measures aimed at addressing some of the unfairness of the High Income Child Benefit Charge.
There was however some tightening of the tax system with changes to the tax position for those domiciled overseas and a scrapping of the favourable tax treatment for Furnished Holiday Let properties.
Summarised below are some of the main measures affecting those in the Healthcare sector.
NHS productivity
Additional spending of £3.4 billion was announced with the aim of making the NHS one of the most digitally enabled and productive healthcare systems globally through the updating of the NHS IT systems and other investments in technology.
These investments were announced as part of a broader NHS productivity plan, which it was said is expected to deliver £35 billion in cumulative savings by 2029-30.
Announcements were also made on patient access and data utilisation.
Further reduction in National Insurance (NIC)
From 6 April, the main rate of NIC that the self-employed pay is to be reduced by a further 2%, beyond the 1% reduction that was announced last year.
That means that for the 2024/25 tax year, the rate will be 6%, compared to 9% in the previous tax year. The small Class 2 National Insurance payments also cease from April 2024.
The main rate of NIC that employees pay will reduce to 8%. This represents a further 2% reduction, following on from the reduction from 12% to 10% that was made in January this year.
Changes to the High-Income Child Benefit Charge
It has long been recognised that the current system penalises single-income households. To address this, from April 2026, the system will be based on household rather than individual incomes.
As an immediate measure, from April 2024, the Government will raise the threshold for the High Income Child Benefit Charge from £50,000 to £60,000. Additionally, the rate of the charge will be halved, so Child Benefit will not be fully withdrawn until an income of £80,000 is reached.
Reduction in Capital Gains Tax (CGT) on Residential Properties
From 6 April 2024, there will be a reduction in the higher rate of CGT payable on residential properties from 28% to 24%. The lower rate will remain at 18% for any gains that fall within an individual’s basic rate band.
Gains on residential properties where there is tax to pay still need to be reported to HMRC within 60 days of the sale, and the tax paid at that point.
Private Residence Relief will continue to apply, meaning the vast majority of residential property disposals will not be subject to CGT.
Scrapping of Furnished Holiday Let tax reliefs
The favourable tax reliefs currently available for Furnished Holiday Let properties will be scrapped in April 2025. These reliefs include a 10% Capital Gains Tax rate on sale, full relief for mortgage interest and the ability to claim Capital Allowances.
Changes to Stamp Duty Land Tax (SDLT)
Multiple Dwellings Relief, which provided relief for bulk purchases, will be abolished from 1 June 2024.
Changes for non-doms
Domicile has always been a complex area, and the current tax rules will be abolished. From 6 April 2025, a new, hopefully simpler, regime will be introduced under which individuals will pay UK tax on any foreign income and gains arising after four years of UK tax residence, instead of 15 years previously.
There are also intentions to move to a residence-based regime for Inheritance Tax.
VAT threshold
The VAT registration threshold increases from £85,000 to £90,000, and the deregistration threshold increases from £83,000 to £88,000 from 1 April 2024.
Personal savings
The British ISA will be a new savings product designed to encourage investment in UK-focused assets. The UK ISA will offer a £5,000 allowance in addition to the existing ISA allowance.
British Savings Bonds will be launched in April 2024 by National Savings and Investments (NS&I) and will provide a guaranteed interest rate fixed for three years.
Alcohol and Fuel Duty
Alcohol duty was frozen until February 2025, and the fuel duty freeze was extended to 2024/25, maintaining the existing 5p cut.
To find out more or discuss your individual tax needs, please contact a member of the Tax team on 0333 123 7171.
