November 22, 2017
Autumn Budget 2017: Snapshot for SMEs
This Autumn Budget was widely trailed as the trickiest to be delivered in a generation.
Slowing economic growth, a longstanding commitment to deficit reduction, Brexit uncertainty and rapid technological change all combined to give the Chancellor Philip Hammond very little room to manoeuvre.
But in an hour-long speech that will contain a great deal of small print, there were some positive headline announcements for SMEs along with key legislative changes.
Here’s our five picks hot-off-the-press:
1. Changes to National Living Wage and Personal Allowance
The National Living Wage will rise by 4.4% in April 2018 to £7.83, up from £7.50 today. In addition, the tax-free personal allowance will rise to £11,850 at the same time alongside a rise in the higher-rate tax threshold to £46,350.
2. Fuel Duty and VAT Threshold Freeze
If this feels like déjà vu, then don’t worry – you’re right. The Chancellor announced a further year’s freeze to Fuel Duty in a repeat of the same break offered last year.
The VAT threshold – the level of earnings over which businesses must pay VAT – has stayed the same at £85,000.
This is considered an easy win by commentators.
3. Changes to Business Rates
The Chancellor announced a couple of key changes to Business Rates:
- A switch to calculating rates based on the Consumer Price Index (CPI) rather than the present Retail Price Index (RPI), providing £2.3bn in relief worth £418.18 to each of the UK’s 5.5m SMEs
- A switch to revaluing rates every three years rather than every five
4. Investment in Infrastructure
Lots of new and reannounced spending for infrastructure in this budget from Philip Hammond, including a second devolution deal for Andy Street’s Midlands Engine, a £1.7bn transport fund to be spent by city mayors, and £500m for 5G and fibre broadband.
5. Tackling the UK’s Productivity Gap
After conceding that UK productivity has flatlined since the Great Recession(see above), the Chancellor announced a range of spending measures to tackle the problem, including a £2.5bn investment fund for UK ‘scale-up’ businesses available through the British Business Bank as well as infrastructure and education investment.
While this gives us a snapshot of key announcements for SMEs, we’ll be looking at what they mean for businesses in-depth – and with a particular attention on payroll requirements – in our special budget webinar: