Press Release
Spring Budget 2024 response from Grant Thornton UK LLP
06 Mar 2024
A Budget for growth or election?
Hazel Platt, Partner and Head of Tax at Grant Thornton UK LLP
“Today’s Budget was a pivotal moment for the Chancellor to set the direction of travel for a ‘long term plan for growth’.
“Core to this is his belief that lower taxes create an environment conducive to growth, this was a Budget with part of the plan committed today but with one eye firmly on the future, setting the groundwork for election manifesto pledges.
“Whilst the Chancellor was clear that businesses play a role in driving growth, this felt to be more of a Budget for individuals than for business. There were targeted measures for certain sectors, and some promises for the future such as incentives to drive investment. Our Business Outlook Tracker research* found that the number one area that businesses would like to see government focus on is investing in skills and training to support business growth and there was some good news on this front. As the competition for talent continues to intensify, businesses will welcome the measures that were at the crux of the Chancellor’s ‘making work pay’ focus. These measures, designed to encourage more people into the labour force, included the further reduction in the main rates of National Insurance Contributions for employees and for the self-employed along with immediate increases in the Child Benefit thresholds.
“With the fiscal headroom for tax cuts tight, the Chancellor had to look elsewhere to fund these measures and introduced a number of revenue-raising measures such as a one-off increase in air passenger duty for non-economy flights and an extension of the Energy Profits Levy by one year.
“The biggest change for the UK tax system was the proposed abolition of the non-dom regime and the introduction of a residency-based regime to benefit those coming to the UK for the first four years of their residence. The balancing act will be to ensure that the UK has rules that are attractive enough to those wishing to come to the UK for business investment and employment purposes, whilst not pushing longer-term non-doms currently benefiting from a 15-year regime, to leave. Should a Labour government be elected, it remains to be seen what the final regime will look like.
“With an election in mind, the Chancellor also had one eye on the future and made some longer-term pledges. To drive business investment further, he pledged to build on permanent full expensing for capital expenditure and widen the benefit to leased assets (when affordable). For workers he pledged to strive to introduce further National Insurance cuts to deliver a regime which is ‘fair, simple and rewards hard work’.”
