While tax cuts for workers and families were at the centre of Jeremy Hunt's Budget today, there were also several announcements to help stimulate investment and continue the government's momentum in making 2024 the year of the SME.

In this article, Emma Jones, Associate Tax Director at GS Verde Tax & Accountants, takes a look at the considerations from today's Spring Budget announced by Chancellor Jeremy Hunt:

Matters related to employers and entrepreneurs:

Recovery Loan Scheme

The Recovery Loan Scheme (RLS) has been renamed as the Growth Guarantee Scheme and extended until the end of March 2026. The scheme offers a 70% government guarantee on loans to SMEs of up to £2m in Great Britain, and £1m in Northern Ireland.

Full Expensing

The policy of 'full expensing' that was announced in the last Budget is to be extended to apply to leased assets. This will apply when fiscal conditions allow, and draft legislation will be published shortly. Full expensing allows businesses to offset investment in items such as IT equipment, and plant and machinery in full.

VAT

The VAT registration threshold will be increased from £85,000 to £90,000 from 1 April 2024.

R&D Reliefs

An expert advisory panel to support the administration of R&D reliefs is to be established by HMRC to improve the functioning of a simplified R&D tax reliefs system.

Investment Zones

The government has announced details of how the Investment Zones in Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, West Midlands and West Yorkshire will use the funding available. This includes offering tax reliefs to attract businesses to these areas, and initial investments in a range of interventions including on skills, research and innovation, and infrastructure. Investment Zones in Wales and Scotland will be extended from five years to ten years and full details of the four Investment Zones in Scotland and Wales will be announced later this year.

Fuel & Alcohol Duty

Fuel duty will be frozen for the 14th year running, for another year and the freeze on alcohol duty has been extended until February 2025.

Property Tax

Capital gains tax on residential property disposals will be cut from 28% to 24%.
The tax regime for Furnished Holiday Lets (FHLs) and stamp duty relief for those buying more than one dwelling are to be abolished.

Matters related to employees:

National Insurance

From 6 April, National Insurance Contributions (NICs) are to be cut from 10% to 8% for employees, a tax saving of over £450 for the average worker on £35,400. The cut to NICs means a combined basic rate of tax and NICs of 28%, the lowest since the introduction of the modern structure of National Insurance in 1975. NICs are also to be cut for the self-employed from 8% to 6% from 6 April.

Child Benefits

More families will be able to claim child benefit from 6 April this year as the threshold at which the highest earning parent starts to lose child benefit is increased from £50,000 to £60,000. Furthermore, the threshold at which child benefit is lost in full increases from £60,000 to £80,000. A consultation on child benefit rules is also to be undertaken, with the intention for it to apply to collective household incomes rather than for individuals from April 2026.

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