Spring Budget 2024 Explained: NI to 8%, CGT Cut, Child Benefit and VAT Changes
Chancellor Jeremy Hunt delivered the Spring Budget on 6 March 2024 — the last Budget before a general election that was widely expected before the end of 2024. The headline measure was a further cut to employee National Insurance, bringing the main rate down to 8% from April 2024. But the Budget contained several other significant changes worth understanding before the new tax year began.
Here is a plain-English breakdown of every major change and what it means for your finances.
Employee National Insurance: main rate cut to 8%
From 6 April 2024, the main rate of employee NICs fell from 10% (itself cut from 12% in January 2024) to 8%. On earnings between £12,570 and £50,270 a year, every pound now costs 8p in NICs rather than the 12p that applied through most of 2023. The combined saving compared to the pre-January 2024 rate is £754/year for anyone earning £50,270 or more, and roughly £900/year for someone on £35,400 once the annualised value of the January cut is included.
Self-employed workers on Class 4 NICs also saw a cut: the main Class 4 rate dropped from 9% to 6% from April 2024, saving a self-employed person on £35,000 profit around £460/year. Class 2 NICs (the flat weekly charge for self-employed people) were effectively abolished for most: those with profits above the Small Profits Threshold retain access to state benefits without paying Class 2 from April 2024.
Capital Gains Tax on residential property: 28% cut to 24%
The higher rate of CGT applying to gains on residential property (other than your main home) was cut from 28% to 24% with effect from 6 April 2024. The basic rate of 18% was left unchanged. This change was largely aimed at encouraging more property sales, on the theory that landlords who had been sitting on gains would be more willing to sell if the tax rate was lower.
The annual CGT exempt amount had already been cut from £12,300 (2022-23) to £6,000 (2023-24) and fell further to £3,000 from April 2024 — meaning more of any gain is now subject to tax even as the rate on property gains fell slightly. Use our CGT calculator to see the effect on your gain.
Child Benefit threshold raised to £60,000
The High Income Child Benefit Charge (HICBC) threshold was raised from £50,000 to £60,000 from 6 April 2024. This means parents with an income between £50,000 and £60,000 who had previously been paying back some or all of their Child Benefit now keep the full amount. Around 170,000 families became newly eligible to claim without any charge-back.
The taper was also reformed: the charge now reduces Child Benefit by 1% for every £200 of income above £60,000, rather than the previous 1% per £100 above £50,000. This means the charge is only fully recovered — and Child Benefit effectively zero — at £80,000 of income (up from £60,000 previously).
VAT registration threshold raised to £90,000
For the first time since 2017, the VAT registration threshold was raised — from £85,000 to £90,000 — from 1 April 2024. This takes around 28,000 small businesses out of the VAT registration requirement and reduces the incentive for others to deliberately limit turnover to stay below the threshold. For freelancers and small traders just above the old threshold, this is a meaningful simplification.
Non-dom status: reform announced
Hunt announced that the current non-domicile tax regime would be replaced from April 2025 with a residence-based system — a move that had long been pressed for by reformers. Under the new system, new arrivals to the UK would pay no UK tax on foreign income for their first four years, but after that all worldwide income becomes taxable. The detail was later substantially revised by the incoming Labour government.
Conclusion
The Spring Budget 2024 delivered meaningful gains for most workers — particularly self-employed people who benefited from both NI cuts. The Child Benefit threshold change was especially significant for families earning between £50,000 and £60,000 who had faced a punishing effective marginal rate. To see exactly how the April 2024 changes affect your take-home pay, run your salary through our updated calculator.