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The Spring Budget 2024: Business Will Benefit, But More is Needed

Written by Bedfordshire Chamber of Commerce | 07 Mar 2024

The Chancellor’s Spring Budget, delivered yesterday (7th March at the time of writing) is, it’s fair to say, hardly a business game-changer.

That said, there’s perhaps more business benefit in it than initially meets the eye - and not least because it contains changes that we, through our connection to the British Chambers of Commerce (BCC), lobbied for.

Here’s a brief overview of what we believe are the Budget’s most important business takeaways.

National Insurance changes: the business positives

Firstly, although the reduction in employees’ NI (from 10% to 8% for employed individuals, and 9% to 6% for the self-employed) might seem to benefit workers rather than businesses, there are potential positive consequences in terms of staff morale and retention.

The average employed couple will now be around £1800 per year better off – a welcome response to cost of living pressures.

But the changes have the potential to do more than just this. According to the Office for Budget Responsibility (OBR), they will lead to the equivalent of around 200,000 new full-time workers joining the labour market by 2028-29, in part because people will increase their working hours to maximise the take-home pay advantages of the reduced NI rate.

Child benefit = labour benefit

Likewise, the changes to child benefit – increasing the maximum income threshold from £50,000 to £60,000 – may not initially appear to benefit business.

But this will mean more people can offset childcare costs, potentially encouraging them into work and creating greater labour availability for businesses that desperately need it.

Cutting VAT: it’s a start

The complexity of the VAT system has long been the bugbear of many businesses, and one way to appease them is to raise the threshold at which VAT is payable, so that fewer of them become liable for it.

And this is exactly what the Chancellor has done, increasing it to £90,000 per year from April.

Removing the administrative and financial burden of VAT could, according to thinking from the Tax Policy Association, reignite growth in around 26,000 businesses that have avoided it for fear of passing the VAT threshold.

Funding up, loans extended

Two significant Budget wins for the lobbying work of the BCC and local Chambers like Bedfordshire include £3m of matched funding to train planners, and an extension to the Recovery Loan Scheme (under its new name, the Growth Guarantee Scheme).

The first will help unlock the planning system to accelerate the development of communities and the built environment – both vital for business growth.

The second enables businesses to access funds to support growth and recovery – as originally instigated during the Covid pandemic – until March 2026, an extension of almost two years to the original June 2024 finish date.

More full expensing but no change to fuel

Finally, the Chancellor’s decision to extend full expensing to some items that have been leased as well as bought will be a welcome one for many businesses struggling with equipment costs.

And although many businesses that make use of vehicles will have hoped beyond hope for a cut in fuel duty, there has at least been a freeze on it – so that’s one less cost rise to contend with.

Optimism and concern

In some quarters, it’s felt that this Budget has overlooked the role of business in returning the country to prosperity and growth - although the sentiment is cautionary rather than doom-laden.

As the British Chambers of Commerce (BCC) put it in its press release, “Business confidence is improving but the coming months will remain challenging for many companies.”

“It is vital that the economy remains front and centre of the campaign to come.” 

For more information on how we influence the Government’s agenda to benefit businesses like yours, or to become a Chamber member if you’re not one already, just call our friendly team on 01582 522448.


Topics: Bedfordshire Chamber of Commerce, Budget, Budget 2024

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