Accountancy sector expresses ‘mixed feelings’ to Spring Budget

Accountancy firms and bodies from the industry have reacted with mixed feelings following the Chancellor’s Spring Budget announcement yesterday (6 March). 

The most awaited announcement concerned a 2p cut to National Insurance contributions, a decision which would benefit 27 million workers, Hunt said.

Glenn Collins, head of technical and strategic engagement at ACCA, said: “The November 2023 cut to National insurance at 2p to the pound was a somewhat surprising move for the Chancellor. 

“While tax cuts are welcome relief to the pay packets of many, given that the tax burden in the UK remains so high and is on course to only climb higher, any cuts now will only have a minimal effect on the overall issues of the cost of living crisis and the drop in real-terms wages with the pressures of inflation.”

Hunt announced that the property capital gains tax will be reduced from 28% to 24% and that the stamp duty relief will be abolished for people with more than one house. 

James Bailey, housing leader at PwC UK, said: “Any positive interventions in today’s Spring Budget around housing were notable in their absence. Measures in relation to reduced capital gains tax and scrapping tax breaks on furnished holiday lettings could bring more properties into mainstream use, but the impact would be expected to be minimal. The changes to multiple dwellings relief could have an adverse impact on attracting much-needed institutional investment into the growing build-to-rent market.”

The Chancellor also announced the abolition of the non-dom tax status from April 2025 – a move that allowed non-UK domiciled individuals to pay tax only on their UK income. 

Rachel McEleney, associate tax director at Deloitte, said: “The new regime will provide a clearer and more objective test than the current rules, but there will inevitably be a lot of complexity in the transition. There may also be winners and losers. Those who come for four tax years or less should be better off, whereas those who wish to come for longer may not.”

Regarding the VAT registration threshold increasing to £90,000 from April, Owen Burn, VAT director at Evelyn Partners, said: “The increase is a welcomed one, with the current threshold having been in place since 1 April 2017. With many small businesses facing challenging trading conditions in an environment of rising supplier costs and a dent in consumer confidence, increasing the VAT registration threshold to £90,000 will help many entrepreneurs across the UK.

“However, we also need to err on the side of caution in that some businesses may opt to manage turnover to remain under the threshold to avoid a potential 20% rise in prices and the additional administrative and financial burden of filing Making Tax Digital compliant VAT returns.”