What does the Prime Minister’s announcement mean for apprenticeships and small businesses

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In what is likely to be a crucial year for the UK economy, the Prime Minister has announced a major reform package to boost apprenticeships and cut ‘red tape’ for thousands of small businesses.  

As of 1st April 2024, the government is now paying the full cost of training in small businesses for apprentices up to the age of 21. This means that small employers will save time and money while offering more opportunities for young people.  

The government has also committed to another £60 million investment for 2025. This means that funding to deliver apprenticeships will be guaranteed for businesses that need them.   

Changes are also being made to the apprenticeship levy system. As of April, large employers who pay the apprenticeship levy can transfer up to 50% of their funds to help other businesses, including smaller firms that take on apprentices. This is a big increase from the previous rate of 25%. 

It’s estimated that these measures will increase the number of available apprenticeships by 20,000.  


Cutting ‘red tape’  

The entire cost of both non-financial and financial reporting for SMEs is considerable. Therefore, the government has announced several deregulatory measures estimated to save businesses around £150 million a year. These measures will include increases to the thresholds that determine whether a company qualifies as small, medium or large by 50%.  Up to 132,000 businesses will move from the ‘large’ category to ‘medium’, removing the requirement to complete administrative and non-financial requirements.    

Further changes in the pipeline will be preceded by a government consultation; they include:  

  • removing the requirement for medium-sized companies to produce strategic reports (currently a requirement under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 
  • increasing the employee size threshold for qualifying as a large company from 250 to 500 employees. It’s estimated that if this measure comes into effect, approximately 1,000 companies could move from the large to medium classification, with the changes in regulatory requirements that will follow.   


Tax changes  

As of 1st April 2024, the VAT registration threshold has increased to £90,000, removing about 28,000 small businesses from the requirement to register for and pay VAT.   

The main rate of Class 4 National Insurance Contributions (NICs) (for the self-employed, who make up a significant number of small businesses), has now been reduced from nine to six per cent. The Employment Allowance for NICs has been increased, meaning that four out of ten businesses will not have to pay NICs.  


Further support 

The Growth Guarantee Scheme, formerly the Recovery Loan Scheme, has been extended by £200 million. The scheme offers a 70% government guarantee on loans to SMEs with a limit of £2 million (£1 million in Northern Ireland). It’s believed that this change will benefit 11,000 small businesses.     

Small businesses who often find business rates a financial burden will be pleased to see that a £4.3 billion package has been announced to support them with this. This includes the news that the small business multiplier has been frozen at 49.9p for the fourth year in a row. The standard business multiplier has increased from 51.2p to 54.6p. 

The Retail, Hospitality and Leisure business rates relief has been extended for a fifth year. Businesses who qualify will receive a 75% relief, up to a cap of £110,000 per business. 

To qualify for relief, a business will have to be mainly used as a:   

  • shop 
  • restaurant, café, bar or pub 
  • cinema or music venue 
  • hospitality or leisure business – for example, a gym, spa or hotel 


These changes will affect many SMEs, and we can only cover the basics here. For further guidance on how these reforms will affect you, contact the Forum on  01565 626001 or info@fpb.org.