The Chancellor labelled it the ‘Budget for long-term growth’, hoping that cuts to the National Insurance rate, freezing of fuel and alcohol duties, investment in key industries and an increase of the VAT threshold would boost a sluggish economy.

Although the UK fell into mild recession last year, inflation looks set to fall below 2% in a few months’ time, and economic growth is a better-than-expected 0.8% this year and forecast to be 1.9% next year (0.5% more than an earlier forecast), according to the Office for Budget Responsibility (OBR).

In following years, growth is expected to rise by 2%, 1.8%, then 1.7% in 2028, the Chancellor said.

“Because we have turned the corner on inflation, we will soon turn the corner on growth,” Mr Hunt told MPs during his House of Commons statement.

But how might the Chancellor’s Budget affect the outlook for businesses in the near term? Here are some key Budget takeaways:

National Insurance cut

National insurance will be cut by a further 2p on the pound from April 6, with an equivalent cut for the self-employed. The reduction follows the 2p cut the Chancellor announced in his autumn statement last year. He said the cut amounted to an estimated £450 annual saving for the average worker, or £900 when combined with the previous cut.

VAT threshold raised

In a boost for small to medium-sized businesses (SMEs), Mr Hunt announced a rise in the threshold for VAT registration from £85,000 to £90,000 from April 1, which he said would “pull tens of thousands of businesses out of paying VAT altogether”.

Fuel Duty frozen

Fuel duty will remain at current rate for 12 months, maintaining the “temporary” 5p cut. This means fuel duty will stay at 53p per litre, which the Chancellor said will save the average car driver £50 in a year. Fuel duty has not been raised since 2011, so it was unlikely that Mr Hunt would increase it in an election year.

Alcohol duty frozen

In a bid to curtail rising costs and support the hospitality and alcohol industries, the Chancellor extended the alcohol duty freeze until February 2025. “We value our hospitality industry and are backing the great British pub,” he said.

Full expensing to expand, but unclear when

Following calls from business lobbying groups, Mr Hunt announced that the full expensing relief for capital investments he announced in his autumn statement will be extended to leased assets “as soon as it’s affordable”. This is likely to encourage further investment in the manufacturing, agriculture, and construction sectors.

Recovery Loan Scheme extended

A further £200m will be invested in the Recovery Loan Scheme, which will be renamed the Growth Guarantee Scheme. The Treasury says this will help 11,000 SMEs access the funding they need.

Investment in key industries

Mr Hunt heralded major new nuclear projects, with the aim of nuclear providing a quarter of all the UK’s energy needs by 2050. He also announced a boost to the construction industry with £242m of investment in new building projects – including aid to transform Canary Wharf in London into a global hub for life science companies.

The Chancellor also pledged to give film studios in England 40% relief on their gross business rates until 2034. He revealed plans for a new tax credit for independent films with budgets of less than £15m and continued tax relief for theatres and touring and non -touring productions.

Employment support

Mr Hunt announced a government childcare plan which, he said, would help 60,000 people enter the workforce. He said he was consulting on changes to high income child benefit charge and increasing the higher income threshold from £50,000 to £60,000.

Pension reforms

The Chancellor said he would reform the UK Individual Savings Account (ISA) system and announced a new British ISA which will provide up to £5,000 of annual tax-free equity investment in British firms. He also announced new requirements for pension funds to show their level of investment in UK equities.

In other announcements, Mr Hunt said he would double funding for digital investment in the NHS, with a £3.4bn plan to modernise its IT systems. He also allocated £230m to improve police response times and £45m to support research by medical charities into dementia, cancer and epilepsy.

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