Budget: Increase in VAT threshold and cuts to self-employed NICs welcomed – but firms still face serious challenges

Business / Wed 6th Mar 2024 at 02:53pm

RESPONDING to Chancellor Jeremy Hunt’s Spring Budget, Federation of Small Businesses (FSB) Policy Chair Tina McKenzie said:

“We welcome today’s increase in the VAT threshold as well as the cut to self-employed National Insurance Contributions (NICs). Elsewhere, we were pleased to see a package of small business support in the Budget documents, including commitments to make progress on the HMRC administrative burden and on the national roll-out of the Business Energy Advice Service, as well as extending the Recovery Loan Scheme under a new name – the Growth Guarantee Scheme. Small firms are crucial for economic growth, and we were glad the Chancellor said that clearly from the despatch box.

“That said, many of those running businesses face serious challenges – not least through rapid hikes in labour and input costs – and many will have understandably hoped that there would be more measures announced today that would help ease the tough decisions small employers are having to make day-in day-out to keep their businesses going.  

“There’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic security small businesses provide is not something the country can afford to risk. While keeping the £5,000 Employment Allowance for the 10th year in a row is invaluable, it should have been uprated to keep pace with the National Living Wage – especially if employer tax thresholds remain frozen. Government must not be over-confident on jobs and hours in this economic environment.

“While more help with rising costs would have been welcome, we were pleased to see help for theatres and productions and fuel duty frozen again.

“As always, the devil is in the detail, and we will be examining the full range of measures. It’s not enough to just make ends meet – we need to make great leaps forward for the sake of the economy, and all the small business owners that operate within it.”

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3 Comments for Budget: Increase in VAT threshold and cuts to self-employed NICs welcomed – but firms still face serious challenges:

2024-03-07 08:06:30

Yest another Conservative budget that benefits the better off the most.

David Forman
2024-03-07 11:31:18

With the non-dom tax loophole closed it leaves Labour with nowhere to go, especially as Shadow Chancellor Rachel Reeves has ruled out a wealth tax. The cut in NI contributions makes life difficult for Keir Starmer and leaves him in the awkward position of having to raise taxes, albeit after a short honeymoon period. In summary, Chancellor Jeremy Hunt has stolen the clothes off Labour's back and left them exposed.

2024-03-07 13:12:58

Mark, 60% of the income taxes are paid by the top 10% of earners. There is a point they are paying more than their fair share, maybe those at the lower end with their hands out continually should consider what their fair contribution is. Of course some people do fall genuinely on hard times or cannot work due to ill health and they should be helped, but the majority are gaming the system. Oh and if you want to pay more taxes its voluntary here is the link https://www.gov.uk/guidance/voluntary-payments-donations-to-government or do you just like the idea of compelling others to pay more

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