Spring Budget 2024

What might the Spring Budget have in store for Northern Ireland taxpayers?

Alan Gourley
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With a general election due to be held within the next 11 months, the Spring Budget could be the last fiscal event of the current UK Government.

We might therefore expect to see primarily voter-pleasing measures on Wednesday however the Chancellor’s generosity is likely to be restricted given the present recessionary status of the UK. I discuss below some specific tax-cutting measures we would like to see, if the numbers allow them.

I have been saying for a while now that the high-income child benefit charge is in much need of reform. The outdated £50,000 threshold has been frozen for some 11 years now and with inflationary pay-rises provided by employers aimed at helping their staff navigate the increased cost of living, more parents each year are finding themselves being hit with the requirement to effectively pay back some, or all, of their child benefit.

The Chancellor has reportedly recently acknowledged the unfairness of the regime as it currently stands, which can see a couple jointly earning £100,000 keep their child benefit while a single earner taking home £60,000 will lose it in full. This Budget could address the lack of fairness by significantly increasing the threshold from which the clawback applies. 

Another significant people-pleasing measure being anticipated is the potential reduction in the basic rate of income tax. A further cut to national insurance, a measure previously delivered following the last Autumn Statement, might however be more affordable as it would apply to a lower proportion of the population (i.e. earners) and encourages those in employment. 

Back in September 2022, we saw the introduction of ‘The Growth Plan’ that included a stretch to the SDLT zero-rate band for residential property to £250,000 (and £425,000 for first-time buyers). I would hope to see a further extension of this growth-focussed measure beyond its expected end date of March 2025, or indeed a commitment to retain the increased thresholds permanently; helping NI homebuyers reduce their costs associated with moving house.

With NI petrol and diesel prices having been on an uphill trend since the beginning of the year, the cancellation of the planned 5p per litre hike in fuel duty on 23 March would be another welcome move for NI drivers. 

With reports suggesting that the Chancellor may be considering using some reform (or removal) of the non-domiciled taxpayer regime to raise revenues and fund potential tax cuts, this could have implications for Northern Ireland.

Given the land border that exists, with an entirely separate tax-regime in the Republic of Ireland (a regime that also has tax benefits for non-domiciled individuals), it is fairly common to have discussions around domicile and the tax benefits that currently exist in the UK. The Chancellor will have to weigh up any change in the regime against the potential downside for the UK economy of losing investment from international visitors. 

With the general election looming, more so than ever the Spring Budget is set to be a significant occasion. If there is room for tax cuts, I expect reducing the tax burden for individuals will gain maximum attention although these need to be sustainable and the Chancellor will need to clearly set out how these are going to be funded.