Are you feeling optimistic ahead of the 2024 Spring Budget? Following the Autumn Statement’s focus on ‘backing British businesses’, and with a General Election on the horizon, we may see announcements that attempt to woo business owners and individuals in the build-up to election campaigns.
Scheduled for Wednesday 6th March, predictions are already circulating about what exactly the Chancellor has in store for the nation. From VAT changes to employment support, check out what we think may be included in the 2024 Spring Budget!
Increased VAT threshold
Having been set at £85,000 since April 2017, it’s no secret that an increased VAT threshold is long overdue! The complexities (and costs) of VAT reporting often mean that many small businesses limit their own growth, keeping turnover low to avoid meeting the threshold. If the threshold was raised, it would allow small businesses more space to explore new business growth opportunities, without the need to navigate VAT obligations.
Enhanced energy bill support
Have you been accessing the Energy Bill Discount Scheme? Introduced in April 2023, the scheme has allowed businesses, voluntary sector organisations, and public sector organisations to access discounted gas and electricity costs. Given that the scheme is set to end on 31st March 2024, there have been calls on the government to extend it or offer new, more targeted reliefs to businesses struggling to meet rising costs.
Uprated Employment Allowance
Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £5,000. If you are eligible, then you’ll pay less each time you run payroll, either until you have exceeded the £5,000 allowance, or when the tax year ends – whichever is sooner! The Federation of Small Businesses (FSB) has urged the government to use the Spring Budget as an opportunity to support employers by uprating the Employment Allowance to £6,500 in line with National Living Wage increases (NLW). If the government were to follow this advice from the FSB, then it would allow employers to hire four people earning NLW, promoting business growth.
Specific business tax reliefs
Following the increase in the main rate of Corporation Tax from 19% to 25% last year, it’s unlikely that there will be any changes announced to rates in the Spring Budget. However, we may see more specific tax reliefs and allowances introduced, in continuation of the government’s pledge to back British businesses from the Autumn Statement. More targeted reliefs would ensure that they are accessed by those who need them most, hopefully encouraging further investment and eventual growth.
Income tax updates
Despite warnings from the IMF not to cut taxes, could the Chancellor still announce changes to the rate of income tax or personal allowance? It isn’t out of the question, with the imminent general election meaning that they may want to increase positive public opinions. It’s thought that an alignment of the personal allowance with the consumer prices index, or 2p cut to the main rate of income tax would be better received by the general public rather than more intricate changes to marginal benefits and reliefs.
On a similar note, there’s speculation that the Chancellor will announce an increase to the threshold at which Child Benefit is claimed back from recipients, from £50,000 to £60,000. Although this won’t really change much for individuals, it may win over some currently undecided voters in time for the election.
Only time will tell just what Jeremy Hunt plans to unveil on 6th March – we’ll certainly be watching with bated breath! Once the statement has been delivered, please be sure to check out our key takeaways and full Budget Summary shortly after.
