Read an overview of the Budget on the Buckinghamshire Economic Intelligence Observatory.

Tax

National Insurance

• From 6th April 2024, the main rate of Class 4 self-employed National Insurance contributions (NICs) will fall to 6%. The main rate of Class 1 employee NICs will fall to 8%.
• The Government will launch a consultation on plans to fully abolish Class 2 NICs for the self-employed.

VAT threshold

• From 1st April 2024, the VAT registration threshold will increase to £90,000.

Other tax measures

• The higher rate of capital gains tax for residential property disposals will be cut from 28% to 24% to encourage landlords to sell their properties.
• The furnished holiday lettings tax regime will be abolished from 6 April 2025, meaning short-term and long-term lets will be treated the same for tax purposes.
• Fuel and alcohol duty will be frozen until 2025. A new duty on vaping will be introduced from October 2026.

Towns Fund

Additional funding will be provided across the UK for levelling-up projects and the Towns Fund will be extended. Funding will also be provided for high-growth sectors such as advanced manufacturing, energy security and net zero.

Planning

• Accelerated Planning Service – The government is publishing the consultation on the proposed design of the new accelerated planning service as well as new measures to constrain the use of extension of time agreements and identifying local planning authorities who are using these excessively.
• Digital Planning – Building on work to digitise the planning system, a new pilot will use Artificial Intelligence to help speed up development of local plans. In addition, new software will be explored to streamline key processes for planning officers.

R&D

• R&D tax reliefs: Expert advisory panel – HMRC will establish an expert advisory panel to support the administration of the R&D tax reliefs. The panel will provide insights into the cutting-edge R&D occurring across key sectors such as tech and life sciences, and work with HMRC to review relevant guidance, ensuring it remains up to date and provides clarity to claimants.
• Research and Innovation Organisation (RIO) fund – The government is allocating £14 million for infrastructure used by public sector research and innovation organisations.
• Spin-outs Review – The government has asked universities to report on their spin-out policies by the end of May 2024 and has also begun consulting on the design of the new £20 million proof-of-concept fund and the pilot approach to supporting the establishment by universities of shared Technology Transfer Offices.

Extension of the Recovery Loan Scheme

• The Recovery Loan Scheme has been renamed as the Growth Guarantee Scheme and extended until the end of March 2026.

HMRC guidance on retraining tax deductibility

• HMRC has published new guidance around the tax deductibility of training costs for sole traders and the self-employed. This guidance ensures that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are allowable costs when calculating taxable profits.

Space

• Connectivity in Low Earth Orbit (CLEO) – The government is confirming up to £100 million to launch the national component of the full £160 million CLEO programme, which will enable UK researchers and businesses to perform the research and development needed for the next generation of satellite constellations.

Film & TV

• Business rates: Film Studios Relief – Eligible film studios in England will receive a 40% reduction on gross business rates bills until 2034. The relief will be implemented as soon as possible, and bills will be backdated to 1 April 2024. This is a tax cut worth around £470 million over the next 10 years. Studios will remain eligible for Improvement Relief. English Local Authorities will be fully compensated for the loss of income as a result of this relief and will receive new burdens funding for administrative and IT costs.
• Additional tax relief for visual effects - the credit rate for visual effects costs in film and high-end TV will be increased to 39% from April 2025, and the 80% cap will be removed for qualifying expenditure for visual effects costs.

Low carbon manufacturing

Increasing funding for the Green Industries Growth Accelerator (GIGA) – The government is increasing the GIGA budget by up to £120 million to further support expansion of low carbon manufacturing supply chains across the UK.

Digital

• AI Upskilling Fund Pilot – £7.4 million AI Upskilling Fund pilot that will help SMEs develop the AI skills of the future.
• SME Digital Adoption Taskforce – will investigate how best to support the adoption of digital technology by SMEs in order to boost their productivity.

Life sciences

• Life Sciences manufacturing funding competitions – funding competitions for large scale investments will open for expressions of interest this summer with a separate competition for medium and smaller sized companies opening in the Autumn.

Pensions & investments

• Capital allowances: Technical consultation on extending full expensing to assets for leasing – Draft legislation on an extension of full expensing to assets for leasing will be published shortly. Full expensing will be extended to assets for leasing when fiscal conditions allow.
• Reserved Investor Fund – The government is publishing the summary of responses to a 2023 consultation on the scope and design of a tax regime for a new UK investment fund vehicle: the Reserved Investor Fund (Contractual Scheme) (RIF). The government will begin legislating for the RIF in the Spring Finance Bill 2024.
• Utilisation of Government Assets – In collaboration with HM Treasury, the Office for Investment is launching a pilot programme to explore the creation of new government asset-backed investment opportunities, where this represents good value for money for the taxpayer. This has the potential to improve the usage of underutilised government assets and inject new funding into dormant assets across the country.
• Local Government Pension Scheme new reporting requirements – Revised annual reporting guidance will require LGPS funds to provide a summary of asset allocation, including UK equity investment, as well as provide greater clarity on progress of pooling, through a standardised data return, taking effect from April 2024.
• Financial Conduct Authority (FCA) Value for Money (VFM) proposals – proposals to require the publication of contract-based Defined Contribution (DC) default funds’ historic net investment returns and a breakdown of their UK investments.

Devolution agreement for Buckinghamshire Council

• Level 2 Devolution Agreements – the government offered Level 2 devolution powers to some councils which cover a whole county or functional economic area. The government has finalised Level 2 devolution powers with Buckinghamshire Council.

Infrastructure

• Electricity grid reform – The government will implement a new stringent connections process from January 2025 and work with the Electricity System Operator to outline further interim reforms to the grid queue process by summer 2024. The government will establish the National Energy System Operator in 2024, and will publish new community benefits guidance by June.

Want more information?

Read an overview of the Spring Budget 2024 on the Buckinghamshire Economic Intelligence Observatory.

More information on the Budget can be found here on GOV.UK.