What the March 2024 Budget Means for Small Businesses

It was a raucous day in the House of Commons as Jeremy Hunt delivered his March 2024 Budget, with members of the Conservative, Labour and Liberal Democrat parties all getting very loud and the leader of the house at one point having to ask the opposition to shout a bit more quietly.

While the usual pantomime was at play, a lot was announced during the Budget, much of which will affect UK small businesses. This article covers the parts of the 2024 Budget that you need to know about and how they could affect your business.

From the Recovery Loans Scheme to the Growth Guarantee Scheme

During his Budget announcement, Hunt announced that the Government will provide £200m of funding to extend the Recovery Loans Scheme and transition it into the Growth Guarantee Scheme, allowing it to continue providing essential support to SMEs in need in the UK.

The new Growth Guarantee Scheme will run until the end of March 2026, offering SMEs a 70% government guarantee on loans of up to £2m in Great Britain and up to £1m in Northern Ireland.

What Does the Growth Guarantee Scheme Mean for Small Businesses?

The Growth Guarantee Scheme offers small businesses another way to access the finance they need to fund their businesses, which is a positive move for business growth in the UK. Businesses who want to consider alternative financing methods can also compare the options available from other lenders.

Vat Registration Threshold

An area that will likely benefit many small businesses following the 2024 Budget is the announcement that the VAT registration threshold is being increased. From April 2024, the VAT registration threshold will increase from £85,000 to £90,000.

What Does the New VAT Registration Threshold Mean for Small Businesses?

The new VAT registration threshold could be a big time and money saver for tens of thousands of businesses.

Capital Gains Tax

In another win for businesses, Hunt announced that he would reduce the higher rate of property gains tax from 24% to 22%.

What Does the Reduced Higher Rate of Property Gains Tax Mean for Small Businesses?

Capital Gains Tax is the tax you pay on any profit you make from selling an asset that has increased in value. This can include any part of your business, from your property to any equipment you sell. Reducing the higher rate of capital gains tax is undoubtedly good; whether your business benefits from it will depend on your circumstances.

Further Reduction on National Insurance

One of the many benefits to households was the announcement that National Insurance (NI) would go down again. From April, NI will go down from 10% to 8% for those in employment and by 8% to 6% for self-employed people.

What Does the Reduction in NI Mean for Small Businesses?

The reduction in NI should mean that employees have more money in their pockets, which they'll hopefully be happy about, but as a small business, it's something you should be aware of when running your payroll.

Cigarettes and Alcohol (and Vaping)

The freeze on alcohol duty was announced in August, but it's been extended to February 2025. The Conservative Government says this, along with savings on business rates, forms part of their approach to "backing the great British pub."

Hunt also touched on plans for a 'vaping products levy', which manufacturers will need to pay on liquid imports from October 2026. He mentioned how vaping products are useful for helping those wanting to stop smoking, but the levy is an attempt to stop children from taking up vaping.

Later in the Budget, Hunt also said that he would announce a one-off increase in tobacco duty at a later date.

What Does this Mean for Small Businesses?

The freeze on alcohol duty is good news for pubs, bars, and businesses reliant on alcohol sales. With inflation seemingly under control, the continuing freeze on alcohol tax will help keep alcohol prices low, encouraging consumer spending.

For businesses selling vaping and tobacco products, you may expect your prices to increase as the vaping products levy comes into effect on October 2026 and whenever the one-off increase in tobacco duty is announced. This increase may deter consumer spending, but it's worth noting that these changes won't be effective for some time.

Fuel Duty

The 5p cut to fuel duty introduced in 2022 was due to expire this March, but in his Budget, Hunt announced that he would freeze fuel duty for another 12 months.

What Does the Fuel Duty Freeze Mean for Small Businesses?

Keeping fuel duty low doesn't just help reduce the cost of filling up your home and commercial vehicles. It has a knock-on effect on the cost of everything. Keeping fuel prices under control can impact inflation, effectively ensuring your operating costs as a business don't spiral out of control. Providing other factors doesn't cause the cost of fuel to increase; this is a very beneficial outcome of the Budget for many businesses.

The Arts

Those striving to make a living through the arts will be pleased to hear some good news for smaller businesses in the creative space during the Budget. Hunt announced that independent films with a budget of £15m or less will receive a new tax credit, and the treasury will also provide eligible film studios in England with a 40% relief on their gross business rates until 2034.

What Does the Budget Mean for the Arts?

The Government's investment in the arts shows an investment not just in British talent but in the businesses surrounding them in England. These incentives should help many of these businesses with their growth plans over the coming years,

The NHS

Although spending on the NHS will stay the same, the Government's productivity plan is receiving full funding. This productivity plan aims to introduce new IT systems and digitise records and processes, helping the NHS to become more efficient.

What Does the NHS Productivity Plan Mean for Small Businesses?

The NHS productivity plan sounds good in principle. If it works, people should see a doctor faster, receive more efficient treatment, and ultimately get more from the NHS. This investment will ultimately benefit small businesses, as people will lose less time taking sick leave, being unable to get appointments at their local GPs, dealing with long wait times for test results, and so on.

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