Jeremy Hunt is set to announce his Spring Budget 2024 on Wednesday and there's a lot of speculation on what he's going to announce. With the Office of Budget Responsibility (OBR) saying there isn't a lot in the pot, I wonder what he can do ...
Jeremy Hunt has been talking about a 2p cut on Income Tax, but I'm not sure that he has the headroom to do that. I think he may simply jig about with a few thresholds, but maybe there'll be another reduction in National Insurance which seems to be a safe thing to do right now.
Apart from the other departments like Health and Social, is there going to be an increase in Defence to 2.5% as Grant Shapps is demanding? With the war in Ukraine showing everyone that we're not spending anywhere near enough on defence, maybe he'll have to take action here.
But what would I personally like to see with the Spring Budget 2024?
- Firstly, I think the rate of Corporation Tax should be reduced for small businesses. Currently, any business earning up to £50,000 profit have a rate of 19%, with it rising to 25% over that. I believe that increasing the 19% threshold to £100,000 is really going to help growth.
- Secondly, the VAT threshold needs to be increased to at least £125,000 per year. It's been £85,000 for year and years and I feel this really does hold back economic growth because some businesses deliberately choose to stay below the £85K threshold so they don't need to deal with the extra administration and tax implications of VAT.
I believe these two important factors will have a huge effect on small businesses that currently face these barriers to growth.
With the general election looming, Chancellor Jeremy Hunt has to put together a solid budget to differentiate the Conservatives from Labour who are currently leading in the polls. But I do wonder what's in the pot and where he feels his priorities lie.
Whatever happens with the Spring Budget 2024, the Government needs to create an environment to encourage us to grow our businesses.
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