UK Budget 2024: What Global Businesses Need to Know 

The UK Chancellor, Jeremy Hunt, has delivered the country’s 2024 Budget. In this blog, we share what this means for global businesses that do business in – or are thinking of doing business in – the UK. 

Jeremy Hunt, the UK Chancellor, has delivered his 2024 Budget, introducing a series of financial and tax reforms. It had been expected that tax cuts would be on the menu, and so it turned out to be, while there were a number of sector-specific announcements that global businesses that operate in the UK should be aware of. 

Before we give you our thoughts, here are a few of the key takeaways from the UK’s 2024 Budget announcements. 

10 Key Points from the 2024 Budget: 

• Non-dom Tax Regime Overhaul: The government will abolish existing tax breaks for wealthy foreign residents with non-domiciled tax status, introducing a “modern residency system” to replace it from April 2025.

• National Insurance Contributions Cut: Employees will see a further 2p cut in their National Insurance contributions from April 2024, translating to an annual saving of approximately £450 for someone on an average salary. 

• VAT threshold: The VAT registration threshold will be raised from £85,000 to £90,000, relieving many small businesses from the VAT burden. 

• Increase in Air Passenger Duty (APD): Business class travellers will face increased APD, aligning with the government’s environmental and fiscal strategies. 

• Introduction of a Vape Levy and Tobacco Duty Increase: A new levy on vaping products will be introduced alongside a one-off increase in tobacco duty, aiming to discourage smoking, while generating additional revenue. 

• The Green Economy: £120m will be allocated for green industries to develop technologies including offshore windfarms and carbon capture and storage projects. 

• “British ISA” for Investments in UK Companies: The government plans to establish a new “British ISA,” allowing an additional annual investment of £5,000 in UK equities, enjoying the same tax advantages as other ISAs. This initiative is part of a broader effort to make the UK a global investment hub. 

• Fuel Duty Cut Maintained: The “temporary” 5 pence cut to fuel duty will be extended for another 12 months, offering an estimated £50 saving to the average car driver next year. 

• Reduction in Property Capital Gains Tax: The higher rate of property capital gains tax will be reduced from 28% to 24%, a move expected to boost revenues through increased transactions. 

• Oil and Gas: The windfall tax on the profits of North Sea oil and gas companies has been extended by a year, raising an expected £1.5bn.

2024 Budget: Analysis and Implications: 

Of interest to any business that invests in the UK is how Budget announcements could stimulate economic growth and foster an internationally competitive tax regime. 

Andrew Fahey, the Briars group CEO, says: “The UK’s Spring Budget 2024 could strengthen the domestic economic landscape, while also positioning the UK as a fertile ground for global businesses.  

“By addressing critical areas such as tax adjustments, investment incentives, and regulatory reforms, it lays down a blueprint for nurturing innovation, attracting international talent, and fostering a competitive global business environment. 

“The UK continues to grow as a hub of international commerce, and we are always open to discussions about how we can help businesses to open UK operations,” Fahey adds. 

As we are in a new election cycle, it should also be noted that the current government has an incentive to introduce popular measures. By reforming the non-dom tax regime, for example, the government may look to please those who have argued for changes to non-dom structures for quite some time.  

We will have to wait to see further announcements about how the new “residency system” will work, as this has the potential to attract wealthy individuals to move their permanent residence to the UK.   

The reduction in National Insurance contributions and the extension of the recovery loan program are direct benefits to employees and small businesses, providing financial relief and support for economic recovery.  

The introduction of the vape levy and increased tobacco duty aligns with public health objectives and will be of particular interest to operators in those sectors. 

Meanwhile, the new “British ISA” encourages domestic investment in UK companies, aligning with the vision of transforming the UK into a hub of innovation and investment akin to Silicon Valley. 

Increased APD for business class travellers is something that will absolutely have an impact on overseas businesses who have operations in the UK. Will this encourage less travel by executives, or see some employees’ travel class downgraded? Only time will tell. 

The reduction in property capital gains tax is an intriguing decision aimed at stimulating the property market, suggesting a focus on increased transactions and revenue generation. 

As with every Budget, businesses and individuals in the UK will need to navigate these changes, leveraging new opportunities and adapting to the evolving economic landscape. 

If your business operates in the UK, or you are thinking about expanding to the country, we stand ready to assist with any questions you may have about the 2024 Budget and how it could impact your operations. Contact us here.