Budget 2024: Key takeaways for business
Jeremy Hunt appeared before MPs today for the Spring Budget, with a 2p cut to the national insurance rate paid by both employees and the self-employed at the heart of his vision.
While interest rates remain high, the chancellor noted that the UK economy has weathered the financial crisis, pandemic, and soaring energy prices amid war in Europe.
He assured the country that inflation should fall below the government’s 2.0 per cent target in just a few months’ time – ‘nearly a whole year earlier than forecast in the autumn statement’ and down from 4.0 per cent in January.
That will come alongside anticipated growth of 0.8 per cent for the national economy in 2024, rising to 1.9 per cent next year and peaking at 2.0 per cent in 2026. Growth is then expected to slow to 1.8 per cent in 2027 and 1.7 per cent in 2028.
Read the March 2024 issue of The Business Magazine, including our feature on skills
Meanwhile, the government is set to boost day-to-day spending by 1.0 per cent in real terms over the next five years.
There was good news for SMEs, too, with the threshold at which companies must register to pay VAT set to rise from £85,000 to £90,000 this April, as well as an extension for the Covid-era government loan scheme for small businesses until March 2026.
And some may benefit from the extension of full expensing, which allows businesses to offset investment in new technology and equipment, to encompass leased assets.
Mr Hunt also pointed to a new tax credit for independent UK films with a budget of less than £15 million, while the previously temporary tax reliefs for touring and orchestral productions will now be made permanent.
On the topic of taxation, a £5,000 UK ISA tax allowance for savers investing in ‘UK-focused’ shares is on the way subject to a consultation.
Property owners will be happy to hear that the higher rate of capital gains tax paid on residential sales has been cut from 28 to 24 per cent – though tax perks for owners of holiday lets were today scrapped along with stamp duty relief for buyers of second homes.
As for the ongoing energy crisis, the chancellor announced another freeze on fuel duty for the coming year and extended the windfall tax on the profits of oil and gas firms to 2029, a leaf from Labour’s book.
He went on to allocate £120 million for the country’s green energy sector, including offshore windfarms and carbon capture and storage projects, but with a particular focus on nuclear.
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