Recapping the measures introduced through the lens of the NACFB community
From the despatch box, Jeremy Hunt unveiled a £10 billion national insurance cut in a pre-election Spring Budget, that also saw the announcement of a new Growth Guarantee Scheme for SMEs.
The Chancellor revealed the OBR’s latest forecasts suggest inflation will drop faster than expected – falling below the Bank of England’s 2% target “…in just a few months’ time”. He added that the OBR expects growth to be 0.8% this year, and 1.9% next year – higher than previously expected.
Commenting on the Chancellor’s Spring Budget, NACFB Chair, Paul Goodman, said: “In an underwhelming speech lacking anything approaching a bigger vision, there was very little within the cautious statement that hadn’t already been trailed this week.”
“However, the NACFB welcomed a response to our calls for clarity over the new Growth Guarantee Scheme and looks forward to continuing a fruitful partnership with the British Business Bank to deliver the new scheme to SMEs via the intermediary community.
“The NACFB will continue to pressure policymakers to reinvigorate the underused Bank Referral Scheme and ensure that small businesses seeking growth finance have access to a broader range of funding solutions,” Paul added.
An overview of key measures can be found below.
Measures relating to the commercial finance community
- The Recovery Loan Scheme will be rebranded as the Growth Guarantee Scheme and receive an additional £200 million in funding.
- The government plans to consult on the possibility of extending the full expensing allowance to include leased assets.
- The VAT registration threshold will increase from £85,000 to £90,000, marking the first raise in seven years.
- Starting 6th April, national insurance will see a 2p cut. This adjustment will reduce the rate from 10% to 8% for employees, and from 8% to 6% for the self-employed.
- The Chancellor introduced the British ISA, allowing for investments of up to £5,000 in British firms.
- A reduction in the higher capital gains tax rate on property from 28% to 24% was announced.
- The tax system for holiday lettings was deemed ineffective, leading to the abolition of the furnished holiday lettings tax relief.
Additional Spring Budget measures
- Extension of the alcohol duty freeze until February 2025.
- Continuation of the 5p fuel duty cut for an additional 12 months.
- Extension of the repayment period for new budgeting advance loans for low-income individuals from 12 to 24 months.
- Abolition of the £90 charge for obtaining debt relief orders.
- Maintenance of the Household Support Fund at its current level for another six months.
- Allocation of £45 million to medical charities, including £3 million to Cancer Research UK.
- Nearly £6 billion designated for the NHS, with specific funds earmarked for updating “outdated” systems and addressing immediate pressures.
- Assignment of £75 million for violence reduction units and “hotspot policing.”
- A pledge of £105 million over the next four years towards the construction of 50 new special free schools.
- Introduction of an excise duty on vaping products and a one-off increase in tobacco duty.
- Implementation of a new tax system for non-domiciled residents, aligning their tax obligations with those of UK citizens after four years – a proposal inspired by Labour.
- Increase in the high-income child benefit charge threshold from £50,000 to £60,000.