Increase in VAT threshold and cuts to self-employed NICs welcomed – but firms still face serious challenges

Press Releases 6 Mar 2024

FSB was pleased to see a package of small business support in the Budget.

Responding to Chancellor Jeremy Hunt’s Spring Budget, Federation of Small Businesses (FSB) Policy Chair Tina McKenzie said:

“We welcome today’s increase in the VAT threshold as well as the cut to self-employed National Insurance Contributions (NICs). Elsewhere, we were pleased to see a package of small business support in the Budget documents, including commitments to make progress on the HMRC administrative burden and on the national roll-out of the Business Energy Advice Service, as well as extending the Recovery Loan Scheme under a new name - the Growth Guarantee Scheme. Small firms are crucial for economic growth, and we were glad the Chancellor has said that clearly from the despatch box.

“That said, many of those running businesses face serious challenges – not least through rapid hikes in labour and input costs – and many will have understandably hoped that there would be more measures announced today that would help ease the tough decisions small employers are having to make day-in day-out to keep their businesses going.  

“There’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic security small businesses provide is not something the country can afford to risk. While keeping the £5,000 Employment Allowance for the 10th year in a row is invaluable, it should have been uprated to keep pace with the National Living Wage – especially if employer tax thresholds remain frozen. Government must not be over-confident on jobs and hours in this economic environment.

“While more help with rising costs would have been welcome, we were pleased to see help for theatres and productions and fuel duty frozen again.

“As always, the devil is in the detail, and we will be examining the full range of measures. It’s not enough to just make ends meet, though that is vital – we need to make great leaps forward for the sake of the economy, and all the small business owners that operate within it.”

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Anna Slater

Anna Slater

Deputy Head of Media and Communications