BUDGET 2024 UPDATE

Understanding the implications of the budget is crucial for our members and the wider SME community in the UK. Now that the announcements have been made, I would like to outline the key points from the budget and discuss their likely impact on our members.

Key Announcements from the Spring Budget:

Income Tax Thresholds and VAT Changes: VAT Registration threshold will be increased from £85,000 to £90,000 from the start of April, saying it would help "tens of thousands of businesses"
Fuel Duty Freeze Extended: In a welcome move for businesses reliant on transportation, the temporary 5p fuel duty cut has been extended. This will help mitigate some operational costs, especially for SMEs that depend heavily on logistics and delivery services.

Child Benefits Threshold Adjustment: The Chancellor addressed the unfairness in the child benefits system, particularly affecting single-earner households. Any adjustments here may indirectly benefit SME owners and employees by providing additional financial relief for families, thereby potentially enhancing disposable income and consumer spending.
Broadband and Energy Bill Support: While the Chancellor has promised to address concerns regarding broadband price increases, specific measures are yet to be detailed. The continuation of support for energy bills will be crucial for SMEs grappling with high operational costs, although details on the extension or modification of these supports are still forthcoming.

Business Rates and Apprenticeship Levy Reform: Despite the anticipation of significant reforms, detailed announcements on business rates and the Apprenticeship Levy were limited. Businesses had hoped for more substantial relief and reforms to support growth and skill development within SMEs.
 

Likely Impact:

The Spring Budget for 2024 presents a mixed bag for our members. The extension of the fuel duty freeze is a positive step, offering some cost savings for businesses that rely on transportation. However, the lack of movement on income tax and VAT thresholds may be seen as a missed opportunity to alleviate financial pressure on growing businesses

The absence of significant announcements on business rates and the Apprenticeship Levy may leave many SMEs feeling overlooked, particularly those in sectors like hospitality and retail, which are still recovering from the impacts of the pandemic and grappling with ongoing economic challenges.

For the giftware and retail sectors, the stability in VAT thresholds means businesses must continue to be strategic about growth to manage VAT implications. The extended fuel duty freeze can help reduce delivery and operational costs, but the broader economic environment remains challenging.

The Giftware Association’s commitment to you is ensuring our members have the support and resources they need to navigate these changes. While the budget has provided some clarity, it also highlights the need for ongoing advocacy and support for SMEs.

Moving Forward:

Our role as a trade body is more important than ever. We will continue to engage with policymakers, advocating for measures that support the growth and sustainability of SMEs in the giftware and home sectors. Additionally, we will provide our members with guidance and support to adapt to these changes, helping them to understand and mitigate the impacts on their businesses.

The Spring Budget for 2024 sets the stage for the year ahead. As we digest these announcements and assess their implications, The Giftware Association remains dedicated to supporting our members through these challenging times, ensuring the giftware and home sectors continue to thrive.

As always if you have any questions then please do not hesitate to get in touch with myself or a member of our team.