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Chancellor’s budget delivers plan for “long-term growth”

Publish Date 8 Mar 2024
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Following weeks of intense speculation about “fiscal headroom” the Chancellor delivered what he described as a Budget for long-term growth. In the end, most of the announcements had been pre-briefed or leaked and there were few big surprises.

This was a very consumer focused Budget, aimed at making people feel like they are better off ahead of a General Election later this year, with few headline measures for businesses. A 2p cut in national insurance and an increase in the threshold for claiming child benefit were paid for in part by the abolition of the non-dom tax regime for those who arrive after April 2025.

Whilst this Budget was clearly intended to be a signal that the Conservatives are cutting taxes for families, this did not feel like an election-launching Budget.

It adds to the sense that the Election is likely to take place in October/November, rather than in May. Many expect a further fiscal event to take place before the election, as it seems unlikely this Budget will shift polls towards the Tories.

The Chancellor went further on changes to the non-dom tax regime than some had expected, abolishing the system in full for those who arrive after April 2025 and replacing it with a residence-based regime. New arrivals will pay no tax on foreign income for the first four years, but then will be subject to the same taxes as UK residents. Transitional arrangements will be in place for those who are already here and we will examine these in further detail.

The Chancellor argued that these changes make the system both fairer and more competitive. The BVCA is engaging with HM Treasury and 10 Downing Street on this and have emphasised the need to ensure the UK remains an attractive destination for investors.

The BVCA has welcomed the announcements to further drive the Mansion House reforms and boost transparency around pension investment into private capital. We look forward to working with Government and regulators to ensure that the detail helps DC schemes identify substantial investment in UK businesses they can make through UK private capital funds. As the Chancellor said, savers in countries like Australia are benefitting from returns that UK savers should be getting too. Michael Moore, our Chief Executive, has also welcomed the announcement of the British ISA, and the drive to foster an environment that encourages the British public to invest for the future.

More broadly, the BVCA welcomed the policy signalling and support provided to certain sectors including the energy, clean aviation, automotive and space tech, however more clarity is needed and the BVCA continues to call for a clearer Net Zero roadmap that sets out clear commitments, actions and a coherent set of incentives. This would boost confidence and encourage the mobilisation of private sector investment.

 

Authored by Juliette Gerstein
Senior Public Affairs Manager, BVCA


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