On Wednesday, the chancellor\’s budget introduced a two-year extension to the current Recovery Loan Scheme (RLS) until June 2026 under the new name of the Growth Guarantee Scheme.
Growth Guarantee Scheme
As with all schemes aimed at supporting SMEs, it\’s very welcome, but a scheme change in the past has always meant fewer lenders re-applying to be part of the latest iteration.
SMEs would benefit from the broad take-up by the existing 55 commercial finance lenders on the current RLS scheme, which runs until June 2024. They\’d also benefit from a rapid transition to the new scheme so there\’s no gap in the funding available when a cash flow fluctuation drives the SME to seek financial support.
Spring Budget \”Growth Guarantee Scheme\” will only live up to its name with take up from lenders.
VAT
In a budget that was thin on business announcements compared to recent years, the VAT registration bar for SMEs was raised from £85,000 to £90,000, and the deregistration bar has been raised from £83,000 to £88,000.
Both measures come into force on April 1st, 2024, and are expected to remove 28,000 SMEs from paying VAT combined.
Property
In property, the chancellor announced that Capital Gains Tax (CGT) on the disposal of liable residential properties is reduced from 28% to 24%. Property, another area of the budget, was very thin on announcements compared to previous years.
We suspect that changes to tax allowances on Holiday Homes for those who had capitalised on the demand for staycations post-COVID will have received a damp reception from owners.
Other notable highlights
A 2p cut in National Insurance for the self-employed, in addition to a 1p reduction in the Autumn Statement, means a 6% rate of Class 4 NICs from April.
Many sectors will welcome any continued freeze in fuel duty levels, as will the hospitality sector\’s freeze in alcohol duty.
That\’s a round-up of the spring budget highlights impacting the commercial finance sector and SMEs. However, pundits and experts suggest this morning that we may still have time for \’one last fiscal statement\’ in the Autumn when the government will attempt to \’pull rabbits from the hat\’ pre-election—as always, time will tell.
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