Spring Budget 2024 – Useful Information for Businesses

The recent spring budget offered a few useful bits and pieces for businesses – but not much!

VAT Threshold Changes in Spring Budget

The threshold at which you must register for VAT has been increased to £90,000 from 1st April 2024.  This will be of real help to small businesses who are hovering around the old £84,000 turnover mark at the moment. Remember that this is a rolling 12 month calculation.

Changes to Property Businesses in Spring Budget

Currently if you let out a property that is not your home, you are subject to capital gains tax when you sell it – 18% if you are a basic rate tax payer and 28% if the gain pushes you into the higher rate tax bracket. The higher rate has now been reduced to 24% from April.

Not perhaps so good, is the news that the benefits of holding a rental property as a Furnished Holiday Let (FHL), for example Airbnb, are being removed as the FHL Tax Regime will be abolished from April 2025.

Changes to Capital Allowances in Spring Budget

If you purchase equipment, large or small, in your business, you are entitled to claim capital allowances against your tax. Up to £1 million each year can be claimed as an annual investment allowance – i.e. the whole cost of the asset can be claimed against your tax bill. In addition, if you are a Limited Company, and are buying new, more expensive plant or machinery, the 2023 budget introduced ‘full expensing’ with no upper limit until 2026. In the autumn statement he made it permanent, and in this budget he has extended that to leased assets also.

Changes for Employees

The National insurance rate for employees has been reduced by a further 2% from April.  This puts it down to 8%.

The threshold at which employees have to start paying back child benefit has been increased to £60K and the chancellor is working on abolishing the ridiculous rule that this applies to any one parent rather than the joint household income.

Changes for the Self-Employed

A small hand-out to the self-employed is the reduction in Class 4 National insurance from 9% to 6% from April this year.  This may well affect any decisions you are thinking of making around incorporation.

(A SEPARATE NOTE FOR SELF-EMPLOYED – Currently your accounts, and tax return are by default prepared on an accrual basis.  This is changing to a default cash basis.  This prevents you from claiming for certain things – so talk to your accountant as soon as possible about any implications for you or get in touch for more information.)

Companies House

Not in the budget, but a reminder that Companies House reform is underway and there are now much more stringent rules around who and how a limited company can be formed – also the confirmation statement filing fee has gone up from £13 to £34.

The full Spring Budget can be found here.

Published On: March 19, 2024

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