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Spring Budget 2024: Key Business Takeaways

Author: MPA
Published On: 8 March 2024

The Chancellor’s ‘Budget for long-term growth’ recognises that the inflation battle is not yet over – as the OBR says that the economy is doing better than expected. Still, we are entering a period of stagnating output.

In his Spring Budget speech, Jeremy Hunt said he had set out a plan to deliver long-term growth for the UK that will build a high-wage, high-skill economy with a path to more investment, more jobs, more productive public services, and lower taxes.

SME Support

Recognising the vital role of small and medium enterprises (SMEs) in the economy, the Spring Budget built on the SME support measures from the Autumn Statement. In addition to raising the VAT threshold, key announcements include:

  • Allocating £200m to extend and rebrand the Recovery Loan Scheme as the ‘Growth Guarantee Scheme,’ facilitating SMEs’ access to essential funding for business growth.
  • Updating HMRC guidance on the tax deductibility of training costs for sole traders and the self-employed to promote investments in productivity.
  • Reinstating the previous eligibility criteria for qualifying as a high net worth or sophisticated investor, along with reviewing the scope of these exemptions.
  • HMRC will establish an expert advisory panel to support the administration of the R&D tax reliefs. The panel will provide insights into the cutting-edge R&D occurring across key sectors such as tech and life sciences, and work with HMRC to review relevant guidance ensuring it remains current and provides clarity to claimants.

spring budget statement image


Investment and Growth Initiatives

The Spring Budget contained several measures focused on encouraging business investment and growth:

  • Pension reforms: Continuing work on the Mansion House reforms to the pension system, intending to unlock up to £75bn of pension fund capital.
  • Investment zones: In April, the first investment zones will launch in the North of England and the Midlands. These zones will offer tax breaks and planning liberalisations to attract business investment.

Investing in industries of the future

The Spring Budget reaffirmed the Government’s commitment to making the UK a global leader in science and innovation. Building on the £750m R&D package announced in the 2023 Autumn Statement, the Chancellor unveiled several new measures:

  •  £14m to boost the UK’s public sector research and innovation infrastructure.
  •  Establishing an HMRC expert advisory panel to improve the administration of R&D tax reliefs. The panel will provide insights into the cutting-edge R&D occurring across sectors such as tech and life sciences, and work with HMRC to review relevant guidance, ensuring it remains current and provides clarity to claimants.

Specific Industry Impacts

Hunt also used the Budget to build on a wider Government strategy to support key sectors – including creative industries, advanced manufacturing, green industries, digital technology and AI, and life sciences – to drive economic growth and innovation.

Green Industries

  • An additional £120m allocated to the £1bn Green Industries Growth Accelerator for low-carbon manufacturing supply chains.
  • Largest ever £1bn+ renewable energy auction round announced.
  • £160m deal with Hitachi to purchase two prospective nuclear power plant sites on Anglesey and in Gloucestershire that had been mothballed.

Digital and AI:

  • Plans to be set out to ensure access to public computing facilities for developing AI products.
  • £7.4m fund to support SME AI skill development.
  • SME Digital Adoption Taskforce to investigate boosting productivity through technology.
  • The Alan Turing Institute is to receive up to £100m over five years.

Life sciences:

  • The government has announced a manufacturing funding of £520 million in the Autumn Statement. It will hold large-scale investment competitions in the coming summer, followed by a SME competition in autumn.
  • £45 million has been allocated to support early-career medical researchers specialising in dementia, epilepsy, and cancer. Among this funding, £3 million will be given to Cancer Research UK.

Vat Registration Threshold

In a boost for small businesses, the VAT registration threshold will increase from £85,000 to £90,000 from 1 April 2024. This marks the first increase in seven years. The Chancellor said this would “reduce the administrative and financial impact” for SMEs, explaining it will bring approximately 28,000 small businesses out of collecting, reporting, and paying VAT altogether.

Fuel Duties

The main fuel duty rates will now remain frozen until March 2025 and the temporary 5p cut to the duty has also been extended. The Government estimates these measures will save car drivers around £50 in 2024/25 and £250 since the 5p cut was introduced, resulting in a total £5bn tax cut across the nation. Businesses that rely heavily on transportation, such as hauliers and delivery firms, will welcome this relief amid high fuel costs.

National Insurance Cuts

Employee National Insurance will decrease by 2 pence, from 10% to 8%, in April. This, along with the Autumn Statement’s 2 pence cut, means employee NICs will have decreased by one-third in less than six months. The average worker earning £35,400 will receive a tax cut of over £900 compared to last year. In addition, the self-employed will see a lower tax burden in April with a 2% point cut in Class 4 NICs, from 8% to 6%, and the scrapping of the requirement to pay Class 2 NICs, saving an average of over £650 annually for those earning £28,000.

Furnished Holiday Lettings regime

In a move to make the property market fairer for renters, the Furnished Holiday Lettings (FHL) regime will be abolished from April 2025. The change aims to increase long-term rental options for locals and raise tax receipts to help fund national insurance cuts. It is estimated that the change will raise around £300m from landlords who benefited from the furnished holiday lettings (FHL) scheme.Properties meeting the qualifying tests for FHLs are taxed under special rules and owners of such properties can access specific tax advantages not available for other lettings, including:

  • Entitlement to plant and machinery allowances on fixtures, furniture, furnishings and equipment. The relief also allowed utilisation of the 100% annual investment allowance and, for corporates, the 130% super-deduction or 100% full expensing for expenditure incurred on such items.
  • Capital gains tax (CGT) reliefs for traders such as rollover relief and mitigating CGT on disposal of a property.
  • Finance and interest restrictions did not apply to loans and mortgages on FHL properties. The new measures will have far-reaching consequences for owners who have let their properties for holiday rental income and met the criteria set out in the FHL regime. It includes those who might own a single holiday home made available for letting or those who let their properties through Airbnb or similar agencies.

spring statement 2024


The Spring Budget of 2024 outlines a strategic plan for long-term growth, emphasising investment in SMEs, innovation, and key sectors. The government’s commitment to boosting research and development, coupled with targeted funding initiatives, aims to solidify the UK’s position as a global leader in science and innovation. Furthermore, the Budget introduces measures to ease the financial burden on small businesses, including an increase in the VAT registration threshold and extended relief on fuel duties. The reduction in National Insurance rates offers significant tax cuts for both employees and the self-employed, aiming to stimulate economic activity and support households during challenging times. As we move forward, the focus on investing in future industries, coupled with tax cuts and financial relief, sets a promising trajectory for business growth and economic resilience in the years to come. This proactive approach underscores the government’s commitment to fostering innovation, supporting small businesses, and driving sustainable economic development.

Expert Guidance and Support

If you have any concerns about any of the changes and want to speak to someone, we’re here to help. Please get in contact with us here: 

Creative and Media
Food & Beverage
IT/Web Services
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