A Call for Resilience and Innovation in Business
Spring Budget 2024
As the dust settles on the announcement of the Spring Budget, businesses across the UK are left with mixed sentiments. Chancellor Jeremy Hunt’s unveiling did not bring the sweeping changes many had hoped for.
There was a lack of announcements targeted to help businesses in the Spring Budget, but there were a few headlines that we wanted to highlight:
- National Insurance rate cut for employees from 10% to 8% (from April 2024)
- Self-employed National Insurance rate cut from 8% to 6% (from April 2024)
- Vat Registration threshold for UK businesses increased from £85,000 to £90,000
- Capital Gains Tax rates cut on higher rate residential property sales from 28% to 24% (from April 2024)
- Confirmation of future changes to the Child Benefit system (from April 2026), immediate changes to the thresholds from April 2024. The High Income Child Benefit Charge threshold will rise from £50,000 to £60,000 with the top taper raised to £80,000 where it is withdrawn
- More detailed information on six new investment zones and the types of businesses that would benefit within them
- Changes to the taxation of Furnished Holiday lets from April 2025
Hope for the Economy
Yet, amidst the lack of substantial support for businesses, there is a glimmer of hope in the economic forecast projected by the Office for Budget Responsibility (OBR).
Inflation has receded more quickly than expected. It should drop below the UK’s 2% target later this year. The OBR expects inflation to slow to an average of 2.2% this year and 1.5% in 2025 before gradually returning to target at the end of the forecast period. The lower inflation forecast is driven by expected significant drops in global energy prices and weaker domestically generated inflation. Lower inflation helps the UK’s growth prospects and a faster recovery in living standards from last year’s record decline.
While the budget may not have delivered the immediate relief that businesses desired, the OBR’s predictions for later in the year hint at a somewhat optimistic outlook. With modest growth on the horizon and inflation expected to dip below the 2% target, there is reason to believe that better days lie ahead.
What This Means for Business
However, in the absence of significant government aid, the onus now falls squarely on businesses to weather the storm. It is a call to action for resilience and innovation. Now more than ever, adaptability is key to survival.
For those grappling with financial complexities such as VAT, there’s support available. Whether it’s navigating the increased registration threshold or understanding the implications of reduced National Insurance contributions, businesses can reach out for assistance.
Innovation will be the cornerstone of success in the post-budget landscape. Whether it’s exploring new markets, embracing digital transformation, or reimagining business models, there are opportunities to be seized amidst the uncertainty. For some changes to the business cost base or financing will be crucial to success. The team at Where Now Consulting works in partnership with its clients to help them grow and thrive. We are here to provide guidance to help steer you through these challenging times.
This year’s Spring Budget may not have been a game changer for businesses, but it serves as a rallying cry for resilience and innovation. As we navigate the road ahead, let us rise to the occasion, adapt for the changing landscape, and emerge stronger than before.
If your business needs assistance with increasing sales, restructuring or trading out of financial distress, please don’t hesitate to reach out.
The full Spring Budget 2024 is published here on the government website and details all the changes listed above and many more.
About Us:
Where Now Consulting Ltd is a consultancy and business advisory firm that specialises in facilitating business transformation and growth. By partnering with our clients, we aim to enhance their overall business performance. Our team consists of professionals with diverse skill sets ranging from sales, operations to finance, allowing us to provide a comprehensive approach to support our clients. Whether your business requires a new growth strategy or is going through a crisis of strategy, profitability, or liquidity, Where Now Consulting is committed to being your partner for future success.