Jeremy Hunt delivered his Spring Budget on 6 March, and it will probably be his last major fiscal announcement ahead of this year’s anticipated general election.

With a focus on reducing tax for the working population and helping parents, there were several announcements in the Budget that affect businesses and employees which I consider and comment on below.

National Insurance Reductions

The good news for employees is that from 6 April 2024 the Government will reduce the main rate of primary Class 1 National Insurance Contributions (NIC) from 10% to 8%. For a worker earning £35,000 they will therefore see a saving in NIC of approximately £1,000 a year.

The good news continues for the self-employed as the Government will introduce legislation to reduce the main rate of Class 4 NIC by 2 percentage points from 8% to 6% from 6 April 2024. This is in addition to the reduction that had already announced in the Autumn Statement taking the rate from 9% to 8%.

These further cuts will take effect from 6 April 2024, meaning workers will see a one third reduction in their main rate of NIC compared to April 2023. This is the largest ever cut to employee and self-employed National Insurance. However, with income tax thresholds frozen until April 2028 the fiscal drag continues to have an impact.

Finally, the Government will launch a consultation later this year to deliver its commitment to fully abolish Class 2 National Insurance.

This undoubtedly is a welcome giveaway for both employees and the self-employed and should see a little in everyone’s pockets.  However, it is unlikely to offer much for business as the freeze in income tax thresholds means that everyone is unlikely to see that much more in their pockets in real terms and so no real change to what people have to spend on the high street.

VAT Threshold

From 1 April 2024, the taxable turnover threshold which determines whether a person must be registered for VAT, will be increased from £85,000 to £90,000. This should give a boost to small businesses. The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £83,000 to £88,000.

Although any increase is welcome, it may not be enough to keep up with inflationary pressures. If the threshold had risen with inflation from 2018 it would be £108,048 today and £112,000 by 2025/26.

Corporation Tax

The Government will introduce legislation in the Spring Finance Bill 2024 to set the charge for Corporation Tax as it does every year. It will maintain the main rate at 25% and the small profits rate at 19%, for the financial year beginning 1 April 2025 as previously announced.

Full expensing

Full expensing, providing 100% corporation tax relief for capital expenditure on plant and machinery, has been extended to cover leased assets.

This is good news for a number of businesses that have internal plant hire companies, who were previously excluded from claiming the super deduction and full expensing.

Extension of Recovery Loan Scheme

The Recovery Loan Scheme will be extended for two years, under the Growth Guarantee Scheme moniker. The Treasury report said that the scheme was helping 11,000 businesses get funding.

More investment in green industries and manufacturing

Up to £120m more to be invested in the Green Industries Growth Accelerator fund to build supply chains for new technology ranging from offshore wind to carbon capture and storage.

The Chancellor announced a further £270m of investment into new automotive and aerospace research and development (R&D) projects, building the UK’s capabilities in zero emission vehicle and clean aviation technology.

£1bn in additional tax relief for the creative industries

An additional £1bn in tax relief has been announced for the creative industries.

This includes:

  • a new UK Independent Film Tax Credit for films with budgets up to £15m.
  • scrapping the 80 per cent VFX (visual effects) cap


Though there have been some positive moves for businesses, commentators have suggested the announcement was lacking overall with many believing this was a budget for a general election, not for business growth.

A persistent challenge to all businesses is rising energy costs and it was unfortunate that the industrial energy cap was not reduced.

As expected, nothing was mentioned in terms of business rates, which continue to create barriers for businesses and hold back growth.

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