In his recent budget speech, Chancellor Jeremy Hunt unveiled a series of significant changes aimed at modernising the UK’s tax system ad stimulating economic growth. Louise Stradling provides a short overview of some of the key changes:

Non Domiciled:

In his Budget speech, Mr Hunt said: “The Government will abolish the current tax system for non-UK domiciled individuals, to get rid of the outdated concept of domicile. We will replace the non dom regime with a modern simpler and fairer residency.” 

As it stands, those with non-dom status are able to earn money from abroad without having to pay tax to HM Revenue and Customers (HMRC) for up to 15 years. This is now being reduced from 6 April 2025 to four years, but after this period, those who continue to live in the UK will pay the same as everyone else.

Capital Gains Tax – cut

The higher rate of Capital Gains Tax (CGT) on property will be cut from 28% to 24% from April 2024 – firing up the residential property market and supporting thousands of jobs that rely on it.

National Insurance – cut

Following a 2 percentage point cut in the Autumn Statement, the main rate of Employee National Insurance will be cut again by a further 2 percentage points from 10% to 8% in April – a one third reduction in the main rate of National Insurance which means the average worker on £35,400 will receive a tax cut of over £900 compared to last year.

Following a 1 percentage point cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will be cut by a further 2 percentage points from 8% to 6% from April – saving the average self-employed person on £28,000 over £650 compared to last year when combined with scrapping the requirement to pay Class 2 NICs announced at Autumn Statement.

British ISA

The new ‘British ISA’ has been unveiled pushing investment into exclusively UK assets allowing investors an additional tax free allowance of £5000.

ISAs, or Individual Savings Accounts, enable savers to invest £20,000 a year without paying tax on interest or returns.

The new British ISA, which will be introduced after a consultation into the implementation.