The Chancellor delivered the Spring 2024 Budget yesterday and announced a series of measures designed to support the stated Government policy plans of reducing public debt and growing the economy. In this blog, we're going to explain the latest financial news from the Chancellor's office.
The economic backdrop indicates promising growth, with GDP forecasted to increase by 0.8% this year and 1.9% the next, surpassing previous estimates than the autumn forecast by 0.5%. This upward growth trend is forecast to extend until 2027, as per the Office for Budget Responsibility (OBR). Additionally, inflation stands at 4%, but is expected to decrease to the Bank of England's target of 2% in the “coming months”.
Specific measures were announced to support business investment, help motivate workers back into work and ensure that productivity increased in public services via technology.
" The main rate of national insurance contributions paid by workers will be reduced from 10% to 8% starting from April 6, 2024. Hunt says this further 2 percent reduction will be worth £450 a year for someone on an average salary. This cut is aimed at benefiting 27 million people in the UK."
The Chancellor reported that with 900,000 vacancies and a large inactive base in the workforce he wanted to bring in measures to reward work and benefit workers:
Here's a breakdown of the latest tax changes announced by the Chancellor:
Specific reference from HMRC around ‘tackling non-compliance in the Umbrella Market’ was raised in the Spring Budget. It was stated the commitment to protect workers employed by Umbrella companies, ensures fair, genuine competition in the market, which is currently leading to significant Exchequer losses caused by tax non-compliance. HMRC has set a date for Tax Administration and Maintenance Day (TAMD) on April 18th, 2024, to address these issues. Also, the government plans to release new guidance in the summer of 2024 to help workers and businesses using umbrella companies.
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Public services spending will keep increasing by 1% each year. In 2024/25, the NHS will get an extra £2.5 billion. There's also £3.4 billion set aside to invest in NHS technology like IT and AI, as part of the "Public Sector Productivity Plan." These investments show the government's commitment to making public services better and more efficient, especially in healthcare.
The Chancellor discussed the business sector, where significant changes are underway. From VAT threshold increases to projections on business investments and targeted measures to support growth, here are the latest developments shaping the business landscape:
To sum up, the Spring 2024 Budget introduces ways to make the economy stronger, support businesses, and improve public services. From tax adjustments to more money for healthcare, the government is working to handle economic challenges and encourage new ideas. As these plans happen, it's important for everyone to keep up to date and understand how these changes affect your business.