The content of this post was created on 06/03/2024 and updated on 07/03/2024.
On Wednesday 6 March, chancellor Jeremy Hunt delivered his spring budget, only three and a half months after his autumn statement. He presented updated forecasts from the Office for Budget Responsibility, reflecting recent economic developments. I know businesses of all sizes are always keen to stay updated on what’s included and you’ll be aware of many of the changes, but we’ve put together a recap which you can take a look at now the dust has settled and remind yourself of what you can expect:
VAT Threshold Increase
In a bid to help small businesses the Jeremy Hunt announced that the VAT registration threshold will rise from £85,000 to £90,000 from 1 April 2024. The deregistration threshold will also increase from £83,000 to £88,000. The expectation is this will remove the need for 28,000 small businesses to pay VAT but is also likely to reduce the number of businesses being able to deregister.
The Recovery Loan Scheme
Hunt is allocating £200m to extend the Recovery Loan Scheme which is to be rebranded as the Growth Guarantee Scheme. This is designed to help 11,000 small businesses in gaining access to much needed finance.
National Insurance Contributions
National Insurance Contributions (NICs) is set to be cut again from 6 April 2024, with Class 1 Primary NICs for employees reducing from 10% to 8%. For the self-employed, Class 4 NICs will decrease from 8% to 6%. These announcements mean the average employee could be £450 better off every year, while it may save the average self-employed person £350 per annum.
Artifical Intelligence (AI)
The Government has announced a £7.4 million upskilling fund pilot that will help SMEs develop AI skills of the future.
Fuel Duty
The main rates of fuel duty will be frozen again until March 2025 meaning a further extension of the 5p cut that was introduced in 2022.
Business Rates
The government has published a summary of responses to its Business Rates Avoidance and Evasion Consultation, and has committed to:
- Extending the Empty Property Relief “reset period” from six weeks to thirteen weeks, from 1 April 2024 in England. This is intended to disincentivise the practice of “box shifting” which sees landlords repeatedly occupy properties for short periods of time in order to claim further Empty Property Relief.
- Consulting on a “General Anti-Avoidance Rule” for business rates in England, to provide the government with greater flexibility to tackle emerging avoidance schemes.
- Increasing its communications, to raise awareness regarding available reliefs and the use of agents.
Eligible film studios in England will receive a 40% reduction on gross business rates bills until 2034, worth around £470 million over the next 10 years. The relief will be implemented as soon as possible, and bills will be backdated to 1 April 2024. Studios will remain eligible for Improvement Relief. English Local Authorities will be fully compensated for the loss of income as a result of this relief and will receive new burdens funding for administrative and IT costs.
Full Expensing and Leasing
The government confirmed that full expensing, a 100% first year capital allowance for expenditure on main pool plant and machinery, and a 50% first year capital allowance for special rate allowances, would be made permanent for companies subject to corporation tax.