Spring Budget 2024: Small firms left waiting for more as VAT change gets lukewarm reception

Small business support measures outlined in today’s Spring Budget are not enough to boost economic growth, industry groups have warned.

While delivering the Spring Budget this afternoon, Jeremy Hunt announced a handful of measures to win over Britain’s SMEs.

Some of the measures, which have been met with a rather lukewarm reception, included an increase in the VAT threshold from £85,000 to £90,000 and a £200m extension to the recovery loan scheme.

However, Marco Forgione, director general at the Institute of Export and International Trade said the rise in the VAT threshold does not line up with what many were hoping.

“We have been pressing for the threshold to be set at £100,000 after it’s been frozen for more than seven years,” Forgione said.

“Small businesses are the lifeblood of our economy, and getting more of them trading internationally is essential to sparking growth in the UK economy,” he added.

Emma Jones, founder of small business support platform Enterprise Nation, said: “This was a budget for a general election, not for small business growth.”

While she is “pleased” with some of the measures outlined by the chancellor, “more action” is needed for small business growth.

“More direct action is needed to tackle the key issues holding back small businesses,” Jones said.

“Late payment remains a major crisis, with many businesses struggling with poor cash flow as a result of being paid late,” she continued.

Federation of Small Businesses policy chair Tina McKenzie said while the measures are “welcomed,” UK small businesses continue to face “serious challenges”.

“Many will have understandably hoped that there would be more measures announced today that would help ease the tough decisions small employers are having to make day-in day-out to keep their businesses going,” McKenzie said.