UK SMEs will be listening out for new policy developments as Chancellor Jeremy Hunt steps up to the despatch box on March 6th to deliver his highly anticipated Spring Budget.
After an Autumn statement that positioned business front and centre, it’s likely that much of the immediate focus will be on benefits for the individual given it’s an election year. But with the government keen to kick-start a stalling economy – and with the latest Capify SME Business Confidence Survey finding 65% of UK SMEs expecting turnover to grow in 2024 – here are fivee potential announcements to keep across that could directly affect your business this year:
Tax cuts
It’s widely reported that Mr Hunt is considering cutting income tax, or at least finding a way to reduce the tax burden on individuals through a national insurance cut for example. Consumers could find themselves with more money in their pocket, particularly in the context of the continued downward trend of inflation – and potentially interest rates too. Clearly, that would be good news for the retail and hospitality sectors.
Labour shortages
Potential measures around expanding childcare eligibility and speeding up Home Office visa processing are also moves that would be aimed at increasing the size and skills of the UK workforce. In addition, City AM reports that the Institute of Directors is lobbying for tax credits to be offered to firms training workers to fill skill shortages. You can read more about the challenges of talent acquisition and retention in our guide here.
Fuel duty
Fuel duty has been frozen since 2011 and is due to go up 5p at the end of March, but according to Sky it seems likely that the Chancellor will extend the freeze – a move that will be welcomed by businesses who rely on cars, vans or lorries in their supply chain.
VAT
The Federation of Small Businesses is calling for the government to allow SMEs to focus on growth by raising the VAT threshold from £85,000 to £100,000. They also want the Employment Allowance to be raised from £5,000 to £6,500 to align it with the increase in the National Living Wage.
Government stimuli
There are also calls for incentives to help SMEs reach net zero to be announced as well as further pressure applied to those businesses that are slow to pay invoices. Furthermore, the Confederation of British Industry is requesting further investment in the UK’s high-growth industries with an increase in the total that can be raised from the Enterprise Investment Scheme (EIS).
