Spring Budget 2024: Measures for Business

The Spring Budget 2024, announced by Chancellor Jeremy Hunt on 6 March, strategically aligns with the UK’s commitment to bolstering economic growth, with a clear focus on supporting businesses through targeted measures and tax cuts. Building upon the groundwork laid in the previous Autumn Statement, the Chancellor introduced a series of initiatives designed to enhance the business environment without veering into unforeseen territory.
National Insurance Cut: A Boon for Businesses
Central to the budget’s business-friendly initiatives is the announcement of further reductions in National Insurance Contributions (NICs). From 6 April 2024, the main rate of employee NICs will see a decrease from 10% to 8%, following a similar cut from the Autumn Statement that took effect from 6 January 2024. This measure is complemented by a two percentage point cut for the self-employed, reducing the rate of Class 4 NICs to 6%.
David Rose comments, “Although welcome news for workers, was this is a missed opportunity to reduce employer’s NIC rates and make it easier and cheaper to hire new employees.”
Reform of the ‘Non-Dom’ Regime
The budget also announces significant changes to the taxation of non-domiciled individuals, with the current remittance-based tax regime set to be abolished from 6 April 2025. This reform introduces a simpler residence-based regime, offering an incentive for international talent and investment to contribute to the UK economy. Transitional arrangements, including a “Temporary Repatriation Facility,” aim to provide a smooth transition for existing non-doms.
Measures Targeting the Built Environment
The abolition of Multiple Dwellings Relief (MDR) from 1 June 2024 signals a shift in the government’s approach to property taxation, aimed at curbing tax advantages for bulk residential property purchases. Additionally, the announcement that furnished holiday lettings (FHLs) will no longer enjoy favourable tax rules from 6 April 2025 seeks to level the playing field between short-term holiday lets and long-term residential rentals.
Incentives for the Creative Industries and Cultural Sector
The budget also introduces a package of tax relief measures for the creative industries, including a new Independent Film Tax Credit and increased relief for visual effects costs, to bolster the UK’s position as a hub for cultural and creative excellence.
Supporting Business Investment
Noteworthy is the extension of full expensing to leased assets and the increase in the VAT registration threshold to £90,000 from 1 April 2024. These measures, alongside the introduction of the Reserved Investor Fund and consultations on innovative market platforms like the Private Intermittent Securities and Capital Exchange System (PISCES), indicate a clear intent to foster investment and innovation within the UK business ecosystem.
David Rose reflects on the budget’s implications for the business sector: “The Chancellor of the Exchequer delivered a Spring Budget that built on measures set out in the last Autumn Statement without any drastic or surprising announcements. The most welcome news for businesses in the Chancellor’s announcement was the permanent full expensing on leased assets ‘as soon as affordable’; the extension of the recovery loan scheme as it transitions into the growth guarantee scheme; and the increase in the VAT registration threshold from £85,000 to £90,000. An extension of full expensing to leases is particularly welcome news for businesses in a Budget that delivers nothing unexpected.”
In conclusion, the Spring Budget 2024 represents a comprehensive approach to nurturing the UK’s business ecosystem. Through a blend of tax cuts, sector-specific support, and strategic reforms, the government aims to reconfirm the UK’s position as a thriving hub for business and innovation. As businesses navigate these changes, leveraging new opportunities for growth and development will be key to capitalising on the budget’s offerings.
For advice and assistance for your business, contactDavid Rose or your usualBeavis Morgan Partner.