Yesterday the Chancellor’s speech recognised that if Britain is to be “the best place in the world to start and grow a business”, what business needs is a simple and predictable tax system.
Here is our overview of the main points we think may have an impact on you and your business:
Small business tax
- For businesses below VAT registration threshold, a delay of a year for the introduction “Making Tax Digital” (quarterly reporting).
Business rates
Three measures for England:
- A cap so rates rise by no more than £50 a month for small businesses losing their rate relief
- Pubs to get a £1,000 discount on business rates of less than £100,000 rateable value (90% of pubs)
- A £300m fund for discretionary relief for local authorities. This amounts to a £435m cut.
Tax avoidance
- £820m of tax avoidance measures.
- VAT on roaming telecoms outside the EU.
- New financial penalty for professionals who create schemes defeated by HMRC.
- Stop businesses converting capital losses into trading losses.
Self-employment
- Treasury to raise £145m from increasing national insurance contributions of some self-employed people.
- National Insurance contributions will rise for the self-employed by 1% to 10% from April next year, rising again to 11% in 2019.
- An investigation into tax treatment is being conducted by Matthew Taylor of RSA.
Tax-free dividend allowance
- Cut from £5,000 to £2,000 from April 2018.
Growth
- Forecast of 2% growth for 2017, up from 1.4%.
- In 2018, growth forecast to be 1.6%, then 1.7% in 2019, 1.9% in 2020, and 2% in 2021.
- Previous forecasts were 1.4% for 2017, 1.7% for 2018, 2.1% in 2019, 2.1% in 2020 and 2% for 2021.
Borrowing
- £51.7bn in 2016-17, £58.3bn in 2017-18, £40.8bn in 2018-19, £21.4bn in 2019-20 and then £20.6bn in 2020-21, and £16.8bn in 2021-22.
- In November, borrowing was forecast at £59bn in 2017-18, £46.5bn in 2018-19, £22bn in 2019-20, £21bn in 2020-21 and £17.2bn in 2021-22.
- Hopes of a surplus by the end of the decade already abandoned.
Duties
- Sugar tax set at 18p and 24p per litre for the main and higher bands (more than 5g of sugar per 100ml and more than 8g per 100ml respectively).
- Freezing vehicle excise duty for hauliers and HGVs.
- New minimum excise duty on cigarettes.
- No changes to duties on alcohol and tobacco.
National living wage
- Rises to £7.50 an hour in April.
Personal tax allowances
- From 6 April 2017 the tax-free personal allowance will increase to £11,500. The higher rate threshold will rise to £45,000 except in Scotland where it remains at £43,000.
Savers
- The promised National Savings & Investments three-year bond paying 2.2% will be available from April on savings up to £3,000.
Women
- £20m fund to combat violence against girls.
- £5m for ‘returnships’ – helping people back into work after a career break.
- £5m for projects to celebrate the 1918 Representation of the People Act.
Consumers
- Green paper on protecting consumers to be published.
Training
- £300m for 1,000 new PhD placements.
- £270m for disruptive technologies such as robotics and driverless vehicles (the ‘industrial strategy challenge fund’).
- A £16m 5G tech hub.
Education
- White paper to be published.
- Funding of £320m for 110 new free schools to take the total to 500.
- Free school transport extended to children receiving free school meals at selective schools.
- £216m invested in school maintenance.
Careers
- Introduction of T-levels – technical qualifications, an alternative to A-levels – for 16- to 19-year-olds.
- £40m for pilots on lifelong learning projects.
Local government
- Midlands engine strategy to be published.
- £690m competition for local authorities to tackle urban congestion.
Scotland, Wales and Northern Ireland
- £350m for the Scottish government.
- £200m for the Welsh government.
- £120m for the Northern Ireland executive.
Social care
- £2bn over the next three years for England.
- Green paper on social care funding to be published later this year.
NHS
- £325m of capital for the first of the new sustainability and transformation plans (STPs), intended to improve healthcare.
- £100m for 100 onsite GP treatment centres in A&Es in England.
If you have any questions on how this budget will affect you and your business get in touch or call 01925 210 000
