Spring Budget 2024: 7 things traders need to know

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Jeremy Hunt unveiled a package of measures aimed at supporting British workers and business in his Spring Budget.

Cutting National Insurance and easing the child benefit threshold were among the few that made headlines. 

But what else did he announce for small businesses and traders? Here we reveal the seven things you need to know. 

1. National Insurance cut by 2p

Both employees and the self-employed will benefit from cuts. 

Class 1 employee NIC

The National Insurance Class 1 rate was previously cut by two percentage points in the Autumn Statement, falling from 12% to 10% in January 2024. Now it will be reduced to 8% from 6 April 2024 when the new tax year begins. 

The change is expected to benefit 27 million people, saving the average worker £450 when combined with the two-percentage-point cut already announced.

Self-employed NIC cuts 

In the Autumn Statement Class 2 rates were abolished and the Chancellor announced a plan to cut Class 4 rates from 9% to 8% from April 2024. 

During the Spring Budget the Chancellor announced self-employed workers would also get a 2p cut and pay 6% from April 2024.

Together with the one-percentage-point cut that was due to come in from April, the measure will mean a saving of £650 for two million self-employed workers.

2. Increase to VAT threshold

If you're self-employed or own a business, the threshold for paying Value Added Tax (VAT) will rise from £85,000 to £90,000 from 1 April 2024.

VAT is a tax that traders charge to whoever is buying their goods and services. Business owners with turnovers higher than the threshold must register with HMRC and then hand the money over in a VAT return.

If your business is no longer eligible for VAT registration, you must apply to HMRC to 'deregister' – in other words, be taken off the list. The threshold for doing so will also be increased from £83,000 to £88,000.

For Northern Ireland, the registration and deregistration thresholds for acquisitions are the same – rising from £85,000 to £90,000.

3. Child benefit reforms 

Currently, parents claiming child benefit must pay some of it back once either of them earns more than £50,000. If either parent earns over £60,000 it must be paid back in its entirety.

From April, the income threshold will rise from £50,000 to £60,000, and the point at which the benefit must be paid back in full will rise from £60,000 to £80,000.

The Chancellor says almost half a million families will get a benefit boost, on average, of nearly £1,300. 

Hunt also announced a consultation to move the high-income child benefit charge to a household-based system to be introduced by April 2026. It is currently unclear whether this would involve another increase to the threshold.

4. Fuel duty frozen

Rates on fuel duty – a tax included in the price you pay for petrol, diesel and other fuels – will be kept the same for another year.

Hunt also stated that the current additional 5p cut in fuel duty, which was introduced in 2022, will also continue. It is estimated the move will save motorists around £50 a year on their fuel bills.

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5. Investment in HMRC digital services

The government says it is putting more money into developing HMRC's digital services for income tax self-assessment customers. 

The details of what improvements will be made are currently vague. But the Treasury confirms it will involve simplifying access to digital services for customers who want to pay in instalments – in advance or in arrears – using a Time to Pay arrangement. This will be from September 2025.

6. Full expensing on leased assets

The government will seek to extend full expensing to assets for leasing when fiscal conditions allow and will publish draft legislation shortly.

This builds on the full capital expensing policy announced by Jeremy Hunt in the 2023 Autumn Statement, which means every pound invested in qualifying plant and machinery can be deducted immediately from profits. This allowance will last for the next three years.

7. Growth Guarantee Scheme

The Recovery Loan Scheme has been renamed as the Growth Guarantee Scheme and extended until the end of March 2026. 

The scheme offers a 70% government guarantee on loans to SMEs of up to £2 million in Great Britain, and £1 million in Northern Ireland.