SPRING BUDGET 2024 AND WHAT DOES IT MEAN FOR SMALL BUSINESSES
For small business owners in the UK, the 2024 Spring Budget will have a big impact on everything from changing the VAT threshold to reforming national insurance. Here, we analyze the Chancellor's statement and discuss how it might impact small businesses like yours.
Chancellor Jeremy Hunt introduced the 2024 Spring Budget on Wednesday, outlining the government's financial goals, following days of leaks and conjecture. The Chancellor describes his most recent proposal as a "Budget for Long Term Growth," emphasising that it will result in increased investment, reduced taxation, and improved public services. Once again, the House of Commons set-piece was dominated by a headline-grabbing 2p cut to employee National Insurance contributions. This could be the government's last budgetary intervention before a General Election later this year.
The 2024 Spring Budget will undoubtedly have an impact on consumers and workers, as has already been extensively discussed, but small firms, freelancers, and other self-employed people will also be significantly impacted by the Budget. Here, we break down Hunt's major announcement's major small business initiatives to make it crystal apparent what the 2024 Spring Budget means for you and your company.
Why not check out our business with it beautiful and unique gift products.Optional gift wrapped with message for free. Or why not put together your own little bundled that we will lovingly gift wrap and send out within 24 hours.
With our easy to use categorized website your be sure to find that perfect gift for that special someone. Click on the link now to view https://bundledgifts.co.uk/
Don't forget to sign up to our newsletter and mark email as safe to receive all those great discounts and special offers.
So what does that mean for Small business owners?
VAT
Effective April 1, 2024, the VAT threshold will increase from £85,000 to £90,000. As the Chancellor noted in his statement, this is the outcome of FSB's intensive agitation for an increase in the threshold.
You are required to register for VAT if your annual VATable sales during the previous 12 months exceeded the threshold, or if they are expected to surpass it in the upcoming 30 days. Since April 2017, this is the first time the threshold has been raised. Visit HMRC's website to learn more about registering for VAT.
Commencing on April 1, 2024, the VAT de-registration threshold will likewise be raised to £88,000. This implies that you may de-register if your VATable sales are less than that amount. The current value of this criterion is £83,000.
Individually Employed Federal Insurance
Effective April 6, 2024, the rate of National Insurance Contributions (NICs) for self-employed individuals will decrease from 8% to 6%. When combined with the earlier NICs decrease we won last autumn, this announcement represents a huge victory for FSB's advocacy on behalf of its members and will result in an average annual tax savings of £650. Employee net income (NICs) will decrease from 10% to 8% in the interim.
Assistance with self-employed.
In response to FSB advocacy, HMRC has released updated guidelines regarding the tax deduction of training expenses for independent contractors and sole proprietors. This guidance guarantees that expenses related to keeping up with technology breakthroughs, updating current abilities, or adapting to changes in industry norms are acceptable when determining taxable earnings.
Free tax shopping
Following the release of a study by the Office for Budget Responsibility (OBR), the government is scheduled to provide an update on the introduction of tax-free shopping for foreign visitors to the UK next week. Leading the charge in the push to implement this are the FSB and the British Chambers of Commerce (BCC), with advantages for supply chains, retail, and the UK's hotel and tourism industries.
National insurance
Further reductions to National Insurance (NI) have been announced by the Chancellor.
The primary rate of Class 4 self-employed NI contributions will drop to 6% as of April 6. This includes the 2% cut that was announced today in addition to the 1% cut that was announced in the Autumn Statement. The Chancellor claimed that, when paired with the Autumn Statement's announcement of the elimination of Class 2 NICs, the average self-employed worker earning £28,000 year would save £650.
Beginning on April 6, the primary rate of NI contributions for Class 1 employees will likewise be reduced by 2%, from 10% to 8%.
There will also be plans for updated guidance on the Tax deductible of training cost for sole traders and the self-employed.
Time to plan what this means for you and your small business
Blog composed by Bundled gifts Ltd
https://bundledgifts.co.uk/