Prime Minister Theresa May has pledged to provide further tax reliefs and corporation tax cuts for ambitious small businesses prior to today’s Autumn Statement.
The Chancellor of the Exchequer, Philip Hammond, will deliver his first Autumn Statement to the House of Commons at lunchtime which is expected to provide significant investment in national infrastructure; futureproofing the country following the result of the EU referendum.
In a speech on Monday at the Confederation of British Industry’s (CBI) annual conference, May also confirmed her intention to lower corporation tax to 15% and beyond, in addition to the cut from 20% to 17% pledged by 2020, as well as £2bn investment into science and technology, featuring tax incentives.
“We will also review the support we give innovative firms through the tax system, because my aim is not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation,” said May.
Yet there is concern that Mr Hammond will push for headline-grabbing changes in his inaugural Autumn Statement and - in the short term - overlook measures to ease the pressure on small businesses; already struggling under the additional pressures of complying with auto-enrolment for pensions and new rules around how dividends are taxed.
With over five million UK small businesses in operation, contributing up to £1.8 trillion to the national economy and providing 15.6 million jobs, the Chancellor is being urged to hear the voice of small business and recognise their vital role in the future success of the country.
A few of the possible incentives the Government could announce to boost the UK small business sector include:
An increase to the current Employment Allowance from £3,000 to £4,000, which would help small firms maintain hiring levels and increase employee wages.
A return of a Small Companies’ rate of Corporation Tax Rate to encourage growth in the small business sector, rather than landing them with sometimes crippling tax bills
Redeemable vouchers towards the cost of suitable bookkeeping software – working towards HM Revenue & Customs’ plans to introduce digital tax reporting and make the transition smoother for all concerned.
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Image: DFID - UK Department for International Development