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UK Spring Budget 2024 – What UK Small Businesses Need To Know

UK Spring Budget 2024 – How It Affects Small Businesses In The UK

On Wednesday 6 th March 2024 the UK Government’s Chancellor, Jeremy Hunt announced his 2024 Spring Budget.
Here is everything UK small businesses should know about the 2024 Spring Budget.

VAT Threshold Increase

This is probably the biggest change in the Spring Budget for small businesses, it’s the first time the threshold has been increased since 2017. From the 1st April 2024, the threshold at which UK small businesses must register to pay valued added tax (VAT) will be increased to £90,000, from £85,000.

The change will take around 28,000 small businesses out of paying VAT altogether, claimed the Treasury.
The VAT de-registration threshold will increase from £83,000 to £88,000. This means that if your VAT sales drop below that level you can de-register.

Recovery Loan Scheme – Extended And Renamed

The government’s Recovery Loan Scheme (RLS) is to be renamed the Growth Guarantee Scheme. It was originally introduced in 2021 to help small and medium sized UK businesses deal with the impact of coronavirus. It will be extended until 31 March 2026.
The Treasury said, the extension will help 11,000 small, and medium UK businesses to access funding.
The government guarantees to the lender, 70% of up to £2m provided to businesses with a turnover of no more than £45m through the scheme.

National Insurance Cuts

Another big pointer after the VAT threshold hold menioned above, are the National Insurance Costs.

The main rate Class 4 National Insurance Contributions (NICs) for the self-employed will be cut by 2p from April 2024, reducing the rate from 9% to 6%. Combined with the abolition of Class 2 NICs announced in the 2023 Autumn Statement, the average self-employed person on £28,000 will save £650 a year, the government said.
The government is also cutting the main rate of employee National Insurance by 2p, from 10% to 8% from 6 April 2024. Combined with the 2p cut announced at the Autumn Statement 2023, this will save the average worker on £35,400 over £900 a year.

SME Business Energy Service

With a view to potentially expanding the scheme nationwide, the UK government said it’s looking at the findings of the SME Business Energy Advice Service (BEAS) pilot in the West Midlands.

BEAS offers free energy assessments and energy efficiency grants to small, and medium businesses.

Creative Industries Tax Relief

Good news for creatives based in the UK. The 2024 Spring Budget made various announcements for the creative sector.

  • A new UK Independent Film Tax Credit at a rate of 53% for films with budgets under £15m that meet the conditions of a new British Film Institute test.

  • A 40% relief on gross business rates bills for eligible film studios in England, until 2034.

  • Higher rates of tax reliefs for theatres, orchestras, museums and galleries will be permanently set at at 40% for non-touring productions, and 45% for touring productions and all orchestra productions.

  • A 5% increase in tax relief for UK visual effects costs in film and high-end TV, under the Audio-Visual Expenditure Credit (AVEC)

  • Removing the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit.

Alcohol Duty Frozen

Do you own a country pub or a city bar? Or do you own a micro brewery making your own craft beers? Check out what the Spring Budget had to say on Alcohol duty below.

Until 1st February 2025 the alcohol duty will be frozen. The UK government said, this will result in 2p less duty on an average pint of beer, 1p less duty on an average pint of cider, 10p less duty on an average bottle of wine, and 33p less duty on an average bottle of spirits.

Fuel Duty Frozen

Big news for the travelling salesperson, or if you are a delivery driver, or even own a fleet of delivery trucks – The rates of fuel duty will remain at the current levels for a further 12 months. By extending the temporary 5p cut, and cancelling the planned increase in line with inflation for 2024-25. This means, the average car driver will save £50 in 2024-25.

Furnished Holiday Lettings Tax Reigme Abolished

Do you have a holiday let, or rent out a cheeky AirBnB by the sea? Find out what the Spring Budget had in store for you below.
From 6 April 2025, the system which gives tax benefits to people who let out a property as a holiday home, rather than a long-term let will be scrapped. This will mean short-term, and long-term lets, will be treated the same for tax purposes.

Atificial Intelligence (AI) Funding For Small Businesses Based In The UK

To help SMEs develop AI skills of the future, the UK government will pilot a new £7.4m fund programme.

Simplified Tax For Small Businesses

Especially for small businesses and individuals, with a view to reducing business burdens over time, the UK government announced, “metrics to track progress being made in simplifying the tax system”
It said it will:

  • Track the views of small businesses and individuals on the ease of dealing with tax issues, and the ease of finding information.

  • Measure how easy taxpayers found it to deal with HMRC.

  • Monitor HMRC’s estimate of the net change in cost to businesses of meeting tax obligations from fiscal event measures.

The government also said, it will also remove confusion around Income Tax Self Assessment by simplifying access to digital services for those who want to pay in instalments in advance – via a Budget Payment Plan, or in arrears via a Time to Pay Arrangement from September 2025.

HMRC Guidance On Training As An Allowable Expense For The Self-Employed

Are you self employed? Do you need training, or have have you thought about training ans was worried about paying for it? Find out below guidance from HMRC on allowable expenses for training for the self employed.

longside the Budget, the government published new guidance around the self-employed claiming training as an allowable expense to reduce their tax payments. The guidance outlines scenarios when the cost of training is likely, and unlikely, to be an allowable expense.

Support For Agri-Food Businesses

Following Launchpad pilots in Liverpool and Tees Valley and eight projects announced in October 2023, a new agri-food Launchpad in mid, and north Wales is to be launched with Ceredigion Council and the Welsh government.

The Innovate UK Launchpads programme, supports emerging clusters of SMEs through funding, wrap-around support and networking opportunities to help businesses innovate and grow.

You can learn more on the Spring Budget 2024 on teh official Governemnt website here


What’s your thoughts on the current UK Spring Budget 2024? How will these changes affect the running of your business? Is there anything listed here that you are pleased to read? Let me know what you think.


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Business Success - Spring Budget 2024 - What's In It For Small Businesses. image credit: Breaking Pic
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