Lawyers react to the spring Budget

Of the £170m, £55m will go towards family justice for non-court dispute resolution and early legal advice, with £15m towards digitising the court process and £100m for rehabilitation and reducing re-offending.

Sam Townend KC, Chair of the Bar Council, welcomed the extra money but added: ‘It is a drop in the ocean in terms of what the justice sector really needs to get back to working order after years of underinvestment.

‘Court buildings are crumbling, solicitors and barristers are burned out, and victims and defendants are left in the backlogs. Justice delays lead to injustice.’

Law Society president Nick Emmerson said: ‘Small amounts of money to the family court system for early advice are welcome, but it shows the government isn’t facing up to the challenges plaguing the justice system.’

Elsewhere, lawyers offered reassurance on the abolition of non-dom tax status and questioned the real-life effect of a cut in national insurance contributions (NICs).

Basil Dixon, partner at Payne Hicks Beach, said non-doms need not panic as ‘the new regime presents attractive opportunities for the well-advised client’.

Dixon said non-dom status was being replaced ‘with a generous regime for new arrivers to the UK, available for the first four years of their residence, where their foreign income and gains will be completely free of UK tax. 

‘Unlike similar regimes eg the one in Italy, there will be no charge to access this treatment.

‘Resident non-doms will need to consider their arrangements carefully in light of the new rules being introduced.  Access to the remittance basis and the protected status of their trusts for income and capital gains tax will go from April 2025, but they have been given a year to get their house in order. The excluded property regime for inheritance tax may well continue, albeit in another form, though it should be possible to create excluded property trusts until April 2025.

‘To reduce the sting of the loss of the remittance basis, our resident non-domiciled clients who hold foreign income and gains will be able to make use of a helpful Temporary Repatriation Facility, enabling them to bring their untaxed wealth into the UK at the encouraging rate of 12%, though they will need to wait for a year before this becomes available from April 2025.’

On the 2% NICs cut, Lee McIntyre-Hamilton, employment tax specialist at Keystone Law, said: ‘For employees it will mean more take home pay and for employers it means there is likely to be slightly less pressure on wage demands due to the cost of living. However, as with the previous 2% increase in January, the cut must be seen in the context of the freeze in tax and NIC thresholds until 5 April 2028 because, as wages continue to increase to match inflation, many will not be better off overall over the coming years due to the so called “fiscal drag” effect.

‘There is also noticeably no similar reduction for the rates of employer NIC and many employers will continue to worry about increasing employment costs.’

Also in the budget, Hunt abolished the furnished holiday lettings regime, scrapped stamp duty relief for people buying more than one dwelling in a single transaction, and reduced property capital gains tax from 28% to 24%.