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This year’s Budget was announced by Philip Hammond on the 29th October where he thanked the public for their hard work and promised that the end of austerity is in sight.
Hammond opened his speech by saying that the 2018 Budget would be “a Budget for hardworking families… the strivers, the grafters, and the carers who are the backbone of our economy.”
Let’s explore what the content of the 2018 Budget means for you and your business.
Business Rate Reform
Hammond announced a much-welcomed reduction in business rates . Business rates for businesses with a rateable value of £51,000 or less will be cut by a third over two years which could result in savings of up to £8,000.
High Street Investment
The biggest risk to our high street is its huge, convenient, competitor – online shopping. Businesses on our high streets are looking to entice customers in to their bricks and mortar stores by providing innovative experiences. All this comes at a cost, so there is much relief to hear of Hammond’s plan to reduce business rates. In addition, Hammond has pledged a £675 million ‘future high streets fund’ to be introduced in April 2019 to improve transport links, redevelop unused shops as homes and offices and re-use historic properties to breathe new life into the high streets .
The Digital Services Tax
Welcomed by many small businesses, and larger businesses just starting out, this tax will even out the playing field between the smaller sized retailers and the online giants with global revenues of over £500m . It has been estimated that this new tax, to be introduced in April 2020, will raise £400m annually.
The tax will be 2% of the sales of companies with a particular business model whose revenues are linked to customers in the UK.
Self Employed Contractors
Hammond announced that changes to the IR35 will come into force in April 2020. IR35 regulations will be extended to large and medium-sized organisations in the private sector . The IR35 is a tax legislation designed to combat tax avoidance by workers who receive their remuneration from their employer through an intermediate arrangement, such as their limited company, but who could be an employee if the intermediary was not used.
New Enterprise Allowance & tax-free training
In an effort to invest in Britain’s entrepreneurs which help to drive our economy forward, Hammond pledged to extend the New Enterprise Allowance scheme for would-be entrepreneurs currently on state benefits .
The state of our roads is certainly a bugbear for many of us who travel by road . The government has pledged a £30bn package to repair bridges and fix the growing number of potholes which are causing damages to vehicles. In addition, Fuel Duty has been frozen for a ninth year in a row saving car drivers around £1,000 and van drivers around £2,500.
Here is a summary of the allowance changes announced which support Hammond’s powerful statement that austerity is almost over .
If you want more information or advice on how the 2018 Budget will affect your business, please get in touch with our team of HR professionals by calling us on 0161 941 2426.
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