Small businesses received some welcome backing in the Budget on 22nd November.
Business owners have grown used to bearing the brunt of the changes and new legislation while receiving little in return, but the Autumn Budget has at given some good news to encourage investment and growth.
£44 billion housing investment
The £44 billion housing investment announcement will be a welcome contribution to local economies, with many small businesses, particularly in the construction industry, reaping benefits.
Many business owners may also be looking at available opportunities under the £2.5 billion scaled-up investment from the British Business Bank, the £500 million investment announced for new technologies including 5G mobile networks and fibre broadband and £2.3 billion investment in research and development.
VAT threshold held at £85,000
The Government has listened to the Federation of Small Businesses and halted plans to lower the VAT threshold. Keeping the VAT threshold at £85,000 for the next two years will be welcome news for many small firms and self-employed business people. The personal allowance will increase to £11,850 from April and the higher rate threshold moves to £46,350.
Cancelling the planned rise in fuel duty will help those businesses which deliver products and services to our homes, where cars and vans are essential not a luxury. Many business owners will also be relieved that vans are excluded from the planned increase in vehicle excise duty for diesel vehicles. In the future, local business owners may want to look closely at the potential benefits of electric cars as company vehicles.
Change in Business Rates
Business rates will now increase in line with the consumer prices index, instead of the higher retail prices index and many local businesses will be delighted to see the back of the so-called 'staircase tax' which would have hiked their rates bills if their workspace was split over more than one floor of a building. More frequent valuations are also welcome and many pubs will benefit from a £1,000 discount for another year.
IR35 Consultation into off-payroll working in the private sector announced
As part of his speech today, Philip Hammond announced a new consultation into off-payroll working in the private sector. Much of the pre-Budget speculation within the contracting community surrounded the extension of April's IR35 tax avoidance reforms in the public sector to the private sector.
The Government will now consult on private sector non-compliance with IR35, but it will also consider the impact on the public sector as part of this review.
Over the coming days, we will be looking in more detail at the many announcements made by the Chancellor which will impact on small businesses, but overall there has at last been some recognition for the over five million small businesses across the U.K. who contribute a massive £1.8 trillion to our economy.
You can download our Autumn Budget Summary here.