While chancellor Philip Hammond’s Spring Budget 2017 speech had nearly 7,000 words, we’ve boiled it down to the 500 most important words for small companies and the self-employed.
Business rate relief
As expected, the chancellor used the Spring Budget 2017 to address a big concern for small businesses. He will be moving forward with three ways to ease the strain of the upcoming business rates re-evaluation. Companies emerging from rate relief will be able to access an additional cap, there will be a £300m fund for local authorities to help special cases and pubs with a rateable value of less than £100,000 will get a £1,000 discount.
Tax-free dividend reduction
While help has been provided in the Spring Budget 2017 on the business rates side, companies have been hit by the decision to limit the tax free dividend allowance from £5,000 to £2,000. The changes, combined with those introduced by former chancellor George Osborne in 2015, are designed to target small company owners who pay a small salary and then a large dividend.
Delay of Making Tax Digital
There has been lots said regarding the impact of Making Tax Digital on small firms, but in the Spring Budget the chancellor said for businesses with a turnover below the VAT registration threshold there will be a one-year delay on the introduction of quarterly reporting – at a cost to the exchequer of £280m.
The government will also consult on the design aspects of the tax administration system, including interest and penalties, with the aim of adopting a “consistent approach across taxes”.
Changes to NICs for self-employed
In response to the growing market of self-employed workers, which is putting a strain on the collection of taxes, an incremental increase to Class 4 NICs is being introduced. This is the rate of national insurance contribution that is based on an individual’s annual earnings.
Self-employed individuals currently pay nine per cent NICs on their annual earnings above £8,060, compared with 12 per cent for employees at companies. The new changes mean that this rate will increase to ten per cent in April 2018, and then 11 per cent in April 2019.
£200m for fibre broadband
It’s an ongoing drive to take superfast broadband to every corner of the UK – especially supporting rural businesses that struggle with poor connections.
Full-fibre broadband vouchers for businesses will be made available, as pat of a £200m initiative aimed at helping local projects leverage private sector investment. The consensus is the major telcos such as BT and Virgin Media need to see critical mass in rural areas to justify investment.
Special business rate discount for pubs
As mentioned above, with pubs closing at a rate of 29 a week the government is giving these kind of companies extra protection. Alongside not announcing any extra duty increases alongside the planned ones in April, smaller pubs will not feel the strain of increased business rates as much.