How will the Spring Budget affect you and your business?

Parliament heard the Chancellor's Budget statement on Wednesday, 6 March.

Several measures were relevant to small business owners and self-employed people. We have rounded up some of the key announcements that may affect you:

VAT  

VAT thresholds will rise from £85,000 to £90,000 on 1 April 2024. FSB campaigned extensively for a rise in the threshold, as the Chancellor acknowledged in his statement.

SELF-EMPLOYED NATIONAL INSURANCE

From 6 April 2024, self-employed National Insurance Contributions (NICs) will be reduced from 8% to 6%. Meanwhile, employee NICs will fall from 10 per cent to eight per cent.

RECOVERY LOAN SCHEME

Government-backed loans will be extended by two years until 2026 as part of a scheme set up to help small firms during the pandemic. Growth Guarantee Scheme, which guarantees 70 percent of loans up to $2 million, will be renamed.

FUEL DUTY

For the next 12 months, fuel duty will remain frozen.

ALCOHOL DUTY

Until February 2025, it will remain at its current level.

AIR PASSENGER DUTY (APD)

Economy passenger APD rates will increase in 2025-26 in line with the forecast RPI rate of inflation. In addition to an inflation-linked increase, premium economy, business, first class, and private jet passengers will see an increase in the APD.

CREATIVE INDUSTRIES

A number of measures were announced by the Chancellor, including permanent theatre tax relief and a 10-year 40 percent business rate reduction for English film studios.

CHILDCARE PROVIDERS

Over the next four years, the Government estimates that additional funding will lead to 60,000 more parents entering the workforce with free childcare entitlement in England.

CHILD BENEFIT

From April 2024, the high income child benefit charge threshold will increase from £50,000 to £60,000.

VAPE DUTY

In October 2026, vapes will be subject to an excise duty, along with a one-off increase in tobacco duty.

HOLIDAY LETS

Furnished holiday lets will no longer be eligible for tax relief.

TRAINING FOR SELF-EMPLOYED

As a result of FSB campaigning, HMRC has published new guidance around tax deductibility for freelancers and sole traders. For the calculation of taxable profits, this guidance ensures that updating existing skills, keeping pace with technological advances, or changing industry practices are allowable costs.

ARTIFICIAL INTELLIGENCE (AI)

A £7.4 million upskilling fund pilot will help SMEs develop AI skills of the future.

TAX-FREE SHOPPING 

Tax-free shopping for overseas visitors to the UK is under consideration by the government and is expected to be announced next week following publication of a report by the Office for Budget Responsibility (OBR).