Simplified Guide for Business Owners: Understanding the Spring Budget Predictions

Attention all business owners! The Spring Budget is set to be announced on March 6th, and it will be aired live on BBC1 at 12pm. This is a crucial event, especially with the general election on the horizon. We anticipate significant announcements that could impact your business, particularly in terms of tax changes and economic growth initiatives. Here’s what you need to know in simple terms.

What is the Budget?

The Budget is a financial statement made by the government every year which outlines its plans for tax changes, spending, and economic strategies. For UK businesses, this means changes in taxes you pay or incentives you might receive.

Predictions for the Upcoming Budget:

1. Inheritance Tax (IHT):

This is the tax paid on an estate (property, money, and possessions) of someone who has passed away. Currently, there are talks that the government might remove this tax entirely, which could be good news for individuals and families.

2. Income Tax Thresholds:

These are limits up to which you don’t have to pay income tax. Since April 2022, there haven’t been changes, but there are whispers that these thresholds might increase. This means you might start paying less tax on your earnings, leaving more money in your pocket.

3. Income Tax Rates:

Following a recent cut in National Insurance, we might also see a reduction in income tax rates. This could further reduce the amount of tax you owe from your earnings, enhancing your take-home pay.

4. Making Tax Digital for Income Tax:

This is a government initiative aimed at making it easier for businesses and individuals to manage their taxes online. Although its launch has been delayed, there might be news on when this will finally kick in.

5. Raising the VAT Threshold:

Currently, businesses with a turnover below £85,000 are exempt from registering for VAT. There’s a possibility this threshold could increase, which could mean fewer tax burdens for small businesses and possibly more room for growth.

Our Hopes for Small Businesses:

We are hoping the Spring Budget will bring good news in the form of tax savings for small businesses. These could come through reductions in various taxes or by raising thresholds that relieve smaller businesses from the complex web of tax obligations. This would not only help businesses grow but also stimulate overall economic growth.

Stay tuned for the budget announcement, and consider how these changes could impact your business.