0161 998 4276

As he did this time last year, the Chancellor Jeremy Hunt stepped up inside a charged House of Commons to deliver all the details from his Spring Budget. As it happened, there were no real surprises that hadn’t already been unveiled pre-announcement. Nonetheless, there were plenty of important takeaways for SMEs and hospitality businesses.

The tip of the iceberg revealed that inflation is now at 4%, with the OBR forecasting it to fall below 2% in a few months’ time – a stat that affects us all. Not got time to rifle through the rest of the 94-page official document to see what else impacts your business? We’ve pulled out some highlights which may just save you the trouble…

Another National Insurance cut

Following the two percentage-point cut announced in the Autumn Statement 2023, the government has announced that they will reduce National Insurance by a further two percentage points from 10% to 8%. That means £450 extra in the pocket for those on the average salary of £35,400. Self-employed National Insurance will also be cut from 8% to 6%.

This is a win-win for you and your employees, resulting in a higher wage for your workforce before any additional salary increases. Meanwhile, those of you running self-employed businesses will also benefit from a higher take-home pay – money that you can reinvest back into your business or keep for yourself!

VAT threshold up, Recovery Loan Scheme extended

It’s the year of the SME, as the government continues to back these businesses as the “lifeblood of the economy and the beating heart of local communities.” And they’ve shown it by increasing the VAT registration threshold from £85,000 to £90,000 from 1st April 2024.

This represents the first increase in seven years and will exempt tens of thousands of businesses from paying any VAT. The government is also extending the Recovery Loan Scheme to support SMEs to access finance, renaming it the ‘Growth Guarantee Scheme’. This will run until the end of March 2026 and offers a 70% government guarantee on loans of up to £2 million in Great Britain, and £1 million in Northern Ireland.

Extension on frozen alcohol duty

The previous freeze on alcohol duty that was due to run up to August 2024 has now been extended until February 2025, benefitting 38,000 pubs across the UK. But while the Chancellor claims he is backing the great British pub, it’s a VAT reduction that the hospitality industry is really calling out for. Without it, our fifth-biggest sector is at danger of more closures and job losses as businesses struggle to keep up with crippling costs.

Creative industry vision

Backing up the plan to support the UK’s high-growth sectors, the government has announced new support for creative industries. The sector has contributed £125 billion in Gross Value Added (GVA) in 2022 and employs 2.4 million people across the UK. In support of their June 2023 vision to grow the sector by a further £50 billion in GVA and create an additional 1 million jobs, £1 billion has been made available in additional tax relief over the next five years.

Navigate the economic landscape with Nabarro Poole

A complex blend of opportunities and challenges are inevitable when running a business – particularly in unsteady economic times like today. The trick is to get organised, get ahead, and get tactical so you can maximise the highs and minimise the lows.

Nabarro Poole can help here, with specialist advice and proactive support to give you the peace of mind over what’s happening now, and a plan of action for the future.

For expert assistance on all things tax, budgeting, forecasting, management accounts and more, get in touch with our friendly team today.