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What Businesses Need to Know from the UK Government Budget Announcement 2024

What Businesses Need to Know from the UK Government Budget Announcement 2024
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What Businesses Need to Know from the UK Government Budget Announcement 2024

What Businesses Need to Know from the UK Government Budget Announcement 2024


The UK Government’s Spring Budget 2024, delivered by Chancellor Jeremy Hunt, introduces several significant changes aimed at fostering growth, supporting small and medium-sized enterprises (SMEs), and ensuring economic stability. Here’s a breakdown of the key points businesses should be aware of:

VAT Registration Threshold Increase

Effective from 1 April 2024, the VAT registration threshold will rise from £85,000 to £90,000. This change is designed to help small businesses grow without the immediate administrative burden of VAT registration. However, there is concern that the increase might not fully account for inflationary pressures, which could still incentivise some businesses to limit their turnover to avoid VAT registration​ (EY Tax News)​​ (Hawksford Services)​​ (Small Business UK)​.

Extension of the Growth Guarantee Scheme

Previously known as the Recovery Loan Scheme, this initiative will be extended until March 2026. It provides SMEs in Great Britain with access to loans up to £2 million (and up to £1 million in Northern Ireland), backed by a 70% government guarantee. This extension aims to support businesses in addressing cash flow issues and pursuing growth opportunities​ (Hawksford Services)​​ (Small Business UK)​.

National Insurance Contributions Reduction

From 6 April 2024, the rate of National Insurance Contributions (NICs) for employees will be reduced by 2%, bringing it down to 8%. For the self-employed, the main rate will drop from 8% to 6%, alongside the abolition of Class 2 NICs. These changes are intended to reduce the tax burden on workers and encourage employment​ (Squire Patton Boggs)​​ (Small Business UK)​.

Full Expensing for Capital Expenditure

The full expensing policy, which provides 100% corporation tax relief on qualifying capital expenditure, has been extended to include leased assets and internal plant hire companies. This measure encourages businesses to invest in new equipment and technology by reducing the upfront cost burden​ (Hawksford Services)​​ (Small Business UK)​.

Fuel and Alcohol Duty Freezes

Fuel duty will remain frozen for another year, continuing the 5p cut and preventing an inflation-based increase. Similarly, the freeze on alcohol duty has been extended until February 2025. These measures are expected to provide some relief to businesses, particularly those in the hospitality and logistics sectors​ (Simply Business)​​ (Small Business UK)​.

Abolition of Multiple Dwellings Relief

From 1 June 2024, Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) will be abolished. This means businesses involved in property transactions will need to prepare for potential changes in their tax liabilities​ (GOV.UK)​​ (EY Tax News)​.

Energy Profits Levy and Green Investment

The government will introduce the Energy Security Investment Mechanism to support green investments and energy security projects. Additionally, £120 million will be allocated to the Green Industries Growth Accelerator to build supply chains for new technologies like offshore wind​ (GOV.UK)​​ (Small Business UK)​.

Economic Crime Levy Adjustment

To better fund measures against economic crime, the Economic Crime Levy for very large businesses with UK revenues exceeding £1 billion will increase from £250,000 to £500,000 annually, starting from the 2024-25 tax year​ (GOV.UK)​.

These changes reflect the government’s efforts to balance immediate economic support with long-term growth initiatives. Businesses should review these updates to understand how they may be impacted and to adjust their strategies accordingly. For further details on the Spring Budget 2024, you can refer to official sources like GOV.UK and financial news platforms.

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