The Spring Budget has been announced and Abbey Accountants is here to dive into the key updates for business owners.

Property and Construction

The Chancellor earmarked a massive £242 million for investments in Barking Riverside and Canary Wharf, signalling a robust drive towards not only erecting nearly 8,000 new homes, but also transforming Canary Wharf into a thriving life science hub.

However, the property sector is set to navigate through some turbulent tax changes. The abolition of the furnished holiday lettings tax regime, along with the scrapping of multiple dwellings relief, indicates a stark shift. Conversely, there’s a silver lining with the reduction of the higher capital gains tax rate on property from 28% to 24%, alongside significant alterations to the non-dom tax system, which are poised to impact UK residents with foreign tax domiciles significantly.

Technology

The technology sector stands to gain from the government’s move to unlock more pension fund capital, offering tech businesses increased powers to secure investment. This could potentially supercharge the UK’s tech landscape by facilitating growth and innovation.

Recruitment

The Spring Budget brings some hope to the recruitment sector, wrestling with 90,000 unfilled vacancies. The introduction of 30 free hours of childcare heralds the potential for an additional 60,000 parents to re-enter the workforce over the next four years.

Sports Media and Entertainment

With the UK’s emergence as Europe’s largest film and TV production centre, the government has outlined its commitment to bolstering tax reliefs for visual effects, film, high-end TV, touring, and orchestral productions.

The key updates so far:

Creative tax credit to increase by 5% and the 80% cap to be removed

New tax credit for UK independent films with budgets of under £50 mil

General Business Outlook: Economic Growth amidst Tax Cuts

With an economic growth projection of 0.8% this year and 1.9% next year, the budget attempts to tackle inflation and fuel economic resilience. Key measures include:

  • The extension of fuel duty for 12 months.
  • A rise in the VAT registration threshold to £90,000 from April.
  • 2% cuts to national insurance rates for employees and the self-employed, underlining the Governments intent to alleviate financial pressures on businesses.
  • UC budget loans repayments increased from 12 months to 24 months.
  • Debt relief orders £90 charge abolished.
  • Fuel duty to be froze for 12 months and 5p cut to stay in place.
  • Alcohol duty froze until Feb 2025.
  • Full expensing to apply to leased assets.
  • There will be a new British ISA which will have an extra £5k allowance.
  • Abolishment of Furnished Holiday Lettings Tax regime.
  • Multi Dwellings Relief now abolished.
  • Residential Property CGT reduced to 24%.
  • Non Dom scheme abolished, replaced with a new residency system. New arrivals to the UK will not pay income or CGT for the first 4 years.  After that will pay the same as UK residents.
  • New child benefit system to be introduced to account for household income from April 2026. From April 2024 the threshold will be raised from £50k to £60k and the higher threshold will now be £80k.

Businesses are encouraged to adapt to these changes, strategising to leverage the potential benefits while bracing for the challenges ahead.

If you have any questions or concerns on how these changes impact your business, please don’t hesitate to get in touch on 01992 642024.