Spring Budget 2024: A summary

The Chancellor of the Exchequer, Jeremy Hunt, presented his 2024 Spring Budget to Parliament on 6 March and published supporting documents on the gov.uk website. When the Chancellor finished his statement in the Commons, the Office for Budget Responsibility (OBR) published updated forecasts for the UK’s economic and fiscal outlook. The OBR is the independent public finances watchdog, which produces the official forecasts for the economy and public finances used by the Chancellor.

The Chancellor has cut the main rate of National Insurance contributions (NICs) for employees and the self-employed by 2 percentage points. The cost is being met through a mixture of other tax increases, higher government borrowing and improvements in the underlying forecast for borrowing.

The underlying forecast for government borrowing has improved largely because lower inflation and interest rates reduce the Government’s debt servicing and welfare costs, by more than they reduce revenues.

The Chancellor said he was presenting a “Budget for long term growth” which would deliver “more investment, more jobs, better public services and lower taxes.” 

Tax and spending announcements

The Chancellor announced policies including on:

• National Insurance – the main rate of Class 1 employee NICs will be cut from 10% to 8% from April 2024; the main rate of Class 4 employee NICs will be cut from 8% to 6% from April 2024. This is in addition to the 1% cut announced in the 2023 Autumn Statement, which also comes into effect in April 2024. 
• The High Income Child Benefit Charge (HICBC) – the threshold HICHB will be raised from £50,000 to £60,000 from April 2024. In addition, the rate at which this is charged will be halved so that Child Benefit is not withdrawn in full until individuals earn £80,000 or more, rather than £60,000. Currently, the HICBC provides for Child Benefit to be clawed back through the tax system for families where the highest earner has an income in excess of £50,000. The Child Benefit payment is withdrawn completely when their income reaches £60,000.
• The taxation of non-doms – the tax regime for non-UK domiciled individuals (‘non-doms’) where people whose permanent home (domicile) is outside the UK may not have to pay UK tax on foreign income, will be abolished. It will be replaced, from April 2025, by a new residence-based regime, where all UK residents who stay in the UK for over four years will pay the same tax on their foreign income and gains, regardless of their domicile status.
• Capital Gains Tax – the higher rate of Capital Gains Tax for residential property disposals will be cut from 28% to 24% from April 2024.
• Stamp Duty Land Tax – from 1 June 2024, the Government will abolish Multiple Dwellings Relief, a tax relief in the Stamp Duty Land Tax regime for people and businesses buying multiple properties in a single transaction (or multiple linked transactions).
• Furnished holiday lettings – from 6 April 2025, the Government will abolish a tax advantage for landlords who let short-term furnished holiday properties over those who let residential properties to longer-term tenants.
• Fuel duty – will be frozen for another year by extending the temporary 5p cut and not uprating duty rates with inflation. Fuel duties have not risen since January 2011.
• Alcohol duty – will be frozen from 1 August 2024 until 1 February 2025. This extends the six-month freeze announced in the 2023 Autumn Statement.
• Tobacco and vaping duties – a new duty on vaping products will be introduced from October 2026. Tobacco duty will also be increased from October 2026. This is to maintain the current financial incentive to choose vaping over smoking. 
• Air passenger duty – rates for premium economy class passengers, business and first class passengers, and for private jet passengers will be increased by more than forecast inflation from 2025/26 to account for recent high inflation. The duty rates would otherwise be increase by inflation.
• VAT threshold – the VAT threshold will be increased from £85,000 to £90,000 in April 2024.
• Energy profits levy – the levy, introduced in May 2022 in response to the rise in oil and gas company profits, will be extended by a year to 2028/29. 
• Household Support Fund – the Household Support Fund allows local authorities in England to make discretionary payments to people most in need to help towards the rising cost of food, energy, and water bills. It has been extended by six months to September 2024 – it was due to end in March 2024. 

The OBR forecasts

The OBR forecasts that the economy will grow a little faster in 2024 and 2025 than it forecast in November 2023, although growth was weaker than previously expected at the end of 2023. Inflation and interest rates are now forecast to fall more quickly than previously expected.

The OBR forecasts that government borrowing will fall from £114 billion in 2023/24 to £87 billion in 2024/25. Borrowing is then forecast to fall in each financial year before it gets to £39 billion in 2028/29, which is the final year of the OBR’s current forecast period. As the chart below shows, a similar pattern is seen for borrowing as a percentage of GDP. 

The government’s underlying debt was equivalent to 84.9% of GDP at the end of 2022/23. The OBR forecasts that it will increase each year before reaching 93.2% of GDP in 2027/28. It will then fall to 92.9% of GDP in 2028/29.

The OBR’s forecast for underlying debt is largely unchanged from November 2023, as the chart below shows. 

Further information summarising the OBR’s economic and fiscal forecasts are provided in the full Library briefing.

For a quick explainer on the Budget, see our Insight: What is the Budget?

Find all of the Library’s research on the 2024 Spring Budget in one place.