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What will the Autumn Budget mean for your business?
How will your business fair as a result of the budget announcements?
Philip Hammond has delivered his second Budget as Chancellor of the Exchequer, but what will this year’s Autumn Budget mean for your business?
Tax breaks for small businesses
Arguably the best bit of news for businesses of all sizes was that corporation tax will drop to just 19%, the lowest rate of any G20 nation.
Small businesses were given a further boost by the announcement that there will be no changes to the VAT threshold for the next two years.
As things stand, businesses must register with HM Revenue and Customs (HMRC) if their VAT taxable turnover exceeds the £85,000 threshold on anything that isn’t VAT exempt.
There were pre-announcement rumours that the Chancellor would cut this limit to fall in line with other countries – France, for example, has a threshold of just €35,000, while Ireland has a limit of €75,000 on goods and €37,500 on services.
Although the current limit remains unaltered, the Chancellor did acknowledge future changes will have to be considered, stating: “I am not minded to reduce the threshold but I will consult on it to see if it could be designed for better incentives.”
And there was more good news for SMEs with the announcement that the uplifting of business rates based on the CPI inflation index, not RPI, will be brought forward by two years to 2018, saving businesses an estimated £2.3 billion.
Other key points from the Autumn Budget
The Chancellor also announced some measures that will have more of an impact on businesses in specific sectors – for example, the discount for pubs with a rateable value less than £100,000 was extended by one year to March 2019, and there could be a future tax on all single-use plastic items, not just carrier bags, that could have a noticeable impact on the fast-food industry.
Fuel duty has been frozen for the eighth consecutive year, which is good news if you have a commercial fleet or haulage operation, though diesel vehicles will be subject to a 1 percentage point increase in company car tax.
Any businesses hit by the ‘staircase tax’ will have their original bills reinstated and backdated and, from April next year, the National Living Wage will rise by 4.4%, from £7.50 an hour to £7.83 an hour.
If your business is in research and development, it’s worth noting that £500m will be put forward for artificial intelligence and 5G initiatives, and there will be £20bn of new investment in UK knowledge-intensive industries.
What do you make of the Autumn Budget, and how will it affect your business? We’d love to know your thoughts in the comments section below, or get in touch with our business community on Twitter or Facebook.