This budget needed to be spectacular to make people take note. However, Liz Truss tried that, and we know what happened there!

So, predictably the budget was not spectacular. But, it did include some interesting points and some savings for the average voter and, arguably, lots of things you probably don’t care about.

Is it enough to make a difference to the Conservatives at the next election? I doubt it. But what difference will it make to you?  The key take aways from the Budget that will influence you as a small business are:

  • National Insurance – A 2% reduction of NI which could save workers and the self-employed up to a further £450 a year. Costing the treasury £10bn.
  • Fuel Duty frozen again – so no increase since 2011 which is a good thing. Saving the average driver £50.
  • Full expensing to leased assets – interesting to see how this will work? Lease costs are already expenses, but does he mean getting 100% relief on the cost of the asset?
  • Increasing VAT threshold to £90,000 from April 2024 – not really a major benefit but an interesting move, especially for anyone who is not VAT registered and nearing the threshold. This hasn’t risen for 7 years so this should have been increased more in many people’s opinion. At least £100K would of been more appropriate.
  • Furnished Holiday Letting – Abolished the tax advantages that renting of holidays lets brings over long-term letting. Essentially, trying to release properties from holiday lets to long term lets by making this form of letting unattractive. Details are light at the moment but we will give more details when we know them
  • Stamp Duty Relief for multiple dwellings scrapped.
  • Reduction in the higher rate of Capital Gains Tax on property to 24% from 28% – interestingly this was announced to try and encourage people to sell their 2nd homes to try and stimulate the housing market.
  • Scrapping the Non-Dom Status for people who live in the UK but keep their permanent, registered place of residence abroad – this will affect many high profile celebrities and billionaires.
  • Child Benefit – removing the cap whereby one person that is earning just over £50,000 in a household loses the child benefit. From April 2026, this will be based on household income, benefiting households with one higher earner.
  • Recognising the above is after the Election, to soften the blow, they have increased the single person earnings threshold for child benefit to £60,000 with immediate effect.

Some things you may care about:

  • Levelling up funding extended.
  • Alcohol duty frozen.
  • Introduction of a British ISA with an additional £5,000 investment allowance
  • A duty on Vaping from 2026
  • Increase in Tobacco Duty

Conclusion

So, this budget was meant to shore up the Conservative Party to make you want to vote for them at the next election, which must be held by January 2025. Did it do that? Time will tell.

The Chancellor has a tricky economy to deal with, he hasn’t got much fiscal head room to give away big tax savings, but he has a party desperate to be re-elected. Public spending is now 90% of GDP but the good news is that inflation has fallen to 4%.

In the end, I am afraid to say that this budget was doomed from the start, sure it makes some changes, some of them quite interesting but it could never go far enough to truly interest people.

Notably there was no mention of increasing thresholds for tax so in fact, overall, this budget represents a tax rise not a tax cut.

What do you think? Will you be voting Conservatives next election?