On Wednesday 6 March, the Chancellor Jeremy Hunt delivered his Budget statement in Parliament. It contained a number of measures relevant to small business owners and the self-employed. Here is our round-up of some of the key announcements which may affect you and your business:
VAT
The VAT threshold will rise from £85,000 to £90,000, with effect from 1 April 2024. This is the result of FSB campaigning extensively for a rise in the threshold, as the Chancellor acknowledged in his statement.
SELF-EMPLOYED NATIONAL INSURANCE
Self-employed National Insurance Contributions (NICs) will be reduced from eight per cent to six per cent, with effect from 6 April 2024. This announcement is a significant win for FSB campaigning on behalf of its members, and together with the previous NICs cut we secured last autumn will mean an average tax saving of £650 per year. Meanwhile, employee NICs will fall from 10 per cent to eight per cent.
RECOVERY LOAN SCHEME
The scheme, originally set up to support small firms during the pandemic with Government-backed loans, will be extended by a further two years, until 2026. This was another measure which FSB campaigned for and was listened to by the Chancellor. It will be renamed as the Growth Guarantee Scheme, in which the Government guarantees 70 per cent of loans of up to £2million.
FUEL DUTY
The current level of fuel duty will be frozen for 12 months.
ALCOHOL DUTY
This will be frozen at its current level until February 2025.
AIR PASSENGER DUTY (APD)
The 2025-26 APD rates for economy passengers will increase in line with the forecast RPI rate of inflation, rounded to the nearest pound. There will be an additional increase in APD for those flying premium economy, business and first class and for private jet passengers, on top of an inflation-linked rise.
CREATIVE INDUSTRIES
Several measures were announced by the Chancellor, including maintaining the current levels of Theatre Tax Relief permanently, and a 10-year 40 per cent relief on business rates for film studios in England.
CHILDCARE PROVIDERS
Additional funding will be made available for childcare providers delivering parents’ free childcare entitlement in England, in a move the Government estimates will lead to 60,000 more parents entering the labour market over the next four years.
CHILD BENEFIT
The threshold at which the high income child benefit charge kicks in will rise from £50,000 to £60,000, with effect from April 2024.
VAPE DUTY
An excise duty will be introduced on vapes from October 2026, alongside a one-off increase in tobacco duty.
HOLIDAY LETS
Tax relief on furnished holiday lets will be scrapped.
TRAINING FOR SELF-EMPLOYED
Following FSB campaigning, HMRC has published new guidance around the tax deductibility of training costs for sole traders and the self-employed. This guidance ensures that updating existing skills, maintaining pace with technological advancements, or changes in industry practices, are allowable costs when calculating taxable profits.
ARTIFICIAL INTELLIGENCE (AI)
Following FSB’s recent report on AI, the Government has announced a £7.4 million upskilling fund pilot that will help SMEs develop AI skills of the future.
TAX-FREE SHOPPING
The Government will consider introducing tax-free shopping for overseas visitors to the UK, and is expected to give its view next week following publication of a report by the Office for Budget Responsibility (OBR). FSB and the British Chambers of Commerce (BCC) are at the forefront of a campaign for this to be implemented, with benefits not just to retail but to supply chains, and the hospitality and tourism sectors across the UK.