In today’s (6th March) Spring Budget, chancellor Jeremy Hunt pledged to extend the Recovery Loan Scheme (RLS), increase VAT threshold for SMEs, as well as cut the main rate of National Insurance tax for employed and self-employed workers.

The government confirmed plans to increase VAT registration for SMEs from 1st April this year from £85,000 to £90,000, and the deregistration threshold from £83,000 to £88,000 — this is expected to take around 28,000 small businesses out of paying VAT altogether.

In addition, the chancellor will allocate £200m to extend the RLS, which will be renamed the Growth Guarantee Scheme, in order to support 11,000 small businesses to access finance.

Alongside this, Hunt announced the cutting of National Insurance for employed workers by 2p from 10% to 8%, as well as a 2p cut for self-employed workers on top of the 1p cut from the Autumn Statement, meaning a 9% to 6% reduction for the main rate of Class 4 NICs for the self-employed from April 2024.

Capital gainst tax for residential property disposal will be reduced from 28% to 24%, while lower rates will remain at 18% for gains which fall within individual basic rates bands — private residential relief will remain in place.

The government has also maintained its rates of fuel duty for a further 12 months, as well as extended the freeze on alcohol duty until 1st February 2025.

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