Spring Budget: SME wish-list?

With the 6^th March Budget just around the corner, many SME business owners are beginning to wonder what’s in Mr Hunt’s red ministerial box, which got us thinking, ‘what might the SME wish-list look like in the ideal world?’

There are 2 reasons to be a little more optimistic than usual this time around:

• Government finances are better than expected – Total HM Revenue and Customs receipts for April 2023 to January 2024 are £695.1 billion, which is £33.6 billion higher than the same period last year.

• The next General Election has to be held before 28 January 2025, and with the incumbent party currently 19 points behind in the polls, “rabbits” and “hats” feel like they might soon be making an appearance.

So if they had Mr Hunt’s ear right now, what changes might SME’s like to see him make:

1. Specific measures to help existing successful UK sectors, to stimulate growth, where we already have a comparative advantage:

• • Financial services
  • Leisure (tourism, entertainment, hospitality, the arts)
  • Technology
  • Healthcare

2. Enlarge the population of those available and looking for work:

• • Free childcare during week day work hours for 48 weeks a year for parents with children aged 9 months to 15 years
  • Shrink the number of university places from the current 44% of 18 year olds back to the 15% it was in the 1980’s
  • Increase the minimum age that a personal or occupational pension (including within the public sector) can be drawn to 60
  • Abolish employee’s NIC

3. To re-establish the natural link between tax and inflation:

• • For personal allowances, higher rate income tax threshold and inheritance tax nil rate bands to increase by inflation every year
  • For national minimum wage to increase by no more than inflation every year

4. Reducing business red tape:

• • Stop the further roll out of Making Tax Digital to smaller businesses, landlords and corporation tax (scheduled for April 2026).
  • Within the contracting industry, abolish off-payroll working rules for the administration of IR35.

5. Harvest the post Brexit dividend:

• • Focus on making free-trade deals with the biggest international markets (China, USA & India)
  • Relax GDPR rules
  • Increase the size thresholds for audit exemption criteria
  • Introduce a light touch audit regime for non-public interest privately owned businesses
  • Favour UK bidders when UK Government contracts go out to tender

6. Subsidise the transition to “green”:

• • Introduce super (eg 150%) first year capital allowance tax deductions for business purchases of green capital items
  • Extend the first year full tax deduction on new electric cars to second hand electric cars.

7. Cancel counter-productive tax rules:

• • Withdrawal of the £1 personal allowance reduction for every £2 personal income exceeds £100k rule.
  • Increase the VAT registration threshold beyond the current £85k.

Wishful thinking, perhaps…

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Disclaimer - All information in this post was correct at time of writing.