Budget 2024 Summary for Small Businesses

Growth

The economy is expected to grow by 0.8% this year and 1.9% next year, rising to 2.0% in 2026; then 1.8% in 2027 and 1.7% in 2028.

Inflation is forecast to fall below 2% target by end of June 2024.

Taxation

Full expensing tax break will now apply to leased assets. This allows companies to deduct the full cost of investments in new machinery and technology to lower their taxable profits.

For employees, the Main rate of National Insurance is cut from 10% to 8% from April 2024. This is paid on earnings between £1,048 and £4,189 a month. For an employee on £35,000 full time salary, this cut is worth £450 a year.

Class 4 National Insurance contributions paid on self-employed profits between  £12,570 and £50,270 is reduced from 8% to 6% in April 2024.

The threshold at which businesses must register and charge VAT is increased from £85,000 to £90,000 from April 2024.

The non-dom tax status has been abolished. It means foreign nationals who live in the UK, but are officially domiciled overseas, will no longer be able to avoid paying UK tax on their overseas income or capital gains.

Property Capital Gains Tax higher rate is reduced from 28% to 24%. This is paid on profits from selling property.

Tax breaks for owners of holiday let properties is scrapped because it created “a distortion meaning that there are not enough properties available for long-term rental by local people”.

Stamp duty relief for people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief, is scrapped.

The High Income Child Benefit Charge, which hits payments if one parent earns above £50,000 a year, is to move to a household-based system from April 2026. In the meantime, the threshold will rise to £60,000 from April 2024. The top of the taper where it is withdrawn is raised to £80,000 (from current £60,000).

Windfall tax is extended until 2029. Oil and gas companies will continue to face extra taxes on their profits.

Other

NHS to get additional £2.5bn this year to tackle issues including waiting lists.

Alcohol duty was due to rise by 3% from August. This will now remain frozen until February 2025.

No change to fuel duty, with 5p cut announced in March 2022 still in place.

Duty rate on tobacco products to increase by £2 per 100 cigarettes to ensure vaping remains cheaper.

Air passenger duty, the tax paid on flights, to go up for business class tickets.

The household support fund, introduced by the government in 2021 to help families struggling with the cost of living, has been extended by six months.

A new British ISA will allow a £5,000 annual investment in UK businesses. It includes all the tax advantages of other ISAs and will be on top of the existing allowances.

To help people save, a new British Savings Bond, delivered through the state-owned National Savings and Investments, will offer a guaranteed rate – fixed for three years.