What the Spring Budget means to you

spring budget

The Spring Budget has been delivered today by the Chancellor Jeremy Hunt. Here we look at the measures that are most likely to have an effect on those in the sector.

National insurance contribution rate will be cut by 2%, taking it from 10% to 8% from April. This means employees and those that are self-employed will pay slightly less national insurance, and therefore keep a little bit more of the money they make.

Having frozen it previously, alcohol duty was due to rise by 3% in August, but they are now being kept frozen until February 2025, to the benefit of 38,000 pubs across the UK.

There has been a further freeze to fuel duty, keeping it at the current level for another year. In 2022, a 5p cut to fuel duty was introduced and was due to expire this month, however it has now been extended. Simply put, this keeps fuel prices at their current rates.

Funding of free childcare hours for parents with children nine months and older will continue for the next two years. This allows parents an easier pathway back into work, and Jeremy Hunt estimates this measure will allow ‘an extra 60,000 parents to enter the workforce in the next four years’.

As we have repeatedly called for, the VAT threshold has been reviewed and amended, as the threshold has been increased from £85,000 up to £90,000, which means businesses gain a tiny bit more breathing room with the money they earn before having to pay VAT on everything they earn. Realistically, and in line with inflation, we believe this figure should be closer to £120,000 – read more in our response to the budget here.

The measures outlined carry a bigger potential benefit for employees than for businesses. There are little to no incentives for businesses, coming at a time when they are sorely needed. However there is slight relief on the pay packet for the average worker, with one of the priorities of the incumbent Government being to encourage more people into work. However, without giving businesses the tools they need to provide quality, gainful employment, these measures are likely to fall flat on their face.

To read the budget in full, click here.

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