Posted on: 23 November 2016
In his first Autumn statement, the Chancellor, Philip Hammond today revealed his budget plans for the UK.
A number of changes are to be made including a rise in ‘national living wage’, an increase in the Insurance Premium Tax rate and perhaps most surprisingly, the announcement that the Autumn Statement is to be abolished. We’ve taken a look at the financial announcements that may impact your small business:
Business Tax Plans
Philip Hammond has announced that the government are continuing to ‘stick to the road map made in March’ with regards business tax plans. As announced in the March Budget the conditions around corporation tax, stamp duty and the abolition of self-employed NI contributions – to name a few - are to remain the same.
He has also stated that steps will be taken towards the problem of UK start-ups being snapped up by larger competitors by investing £400m, via the British Business Bank to invest in small businesses with potential for growth.
Landlord and letting agent fees
Letting agency fees in the rental market have ’spiralled, despite attempts to regulate them’ and the government will ban fees for tenants. This means that landlords will likely need to foot the bill for letting agent admin fees and office charges.
National Living Wage
The “national living wage” will increase from £7.20 per hour to £7.50 in April next year.
National Insurance Thresholds
From April 2017, employee and employer National Insurance thresholds to be equalised at £157 per week.
Rural Business Rate Relief
Rural rate relief will be increased to 100%, Hammond announced that this was to help give businesses in rural areas a boost.
Insurance Costs Increased
The Insurance Premium Tax rate will increase on 17th June 2017 from 10% to 12% . This is a tax charged on general insurance premiums including business insurance covers such as buildings, contents and motor insurance.
Abolition of the Autumn Statement
Philip Hammond has announced that he is abolishing the Autumn statement. Starting in autumn 2017, Britain will have an autumn Budget, announcing tax changes in advance of the start of the tax year. From 2018 there will be a Spring Statement, responding to update on the forecast. He says he will not make significant changes twice a year and noted that no other major economy does this.
Other Key Points:
- Fuel duty tax to be frozen
- Whiplash compensation rules are due to change, this could save drivers around £40 a year on average
- NHS to receive an additional £10bn
- The government plan to invest more than £1bn in digital infrastructure including 5G trials. From April there will be 100% business rates relief on investment in new fibre infrastructure.
- Plans are being made to double the UK Export’s financial capacity
- Employers and employees who use benefits in kind schemes will pay the same tax as everyone else (but there will be exceptions, including childcare and cycling).
- £2.3bn housing infrastructure fund to help provide 100,000 new homes in high-demand areas
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