Philip Hammond has delivered his third Budget as chancellor. The Chancellor’s opening remarks about the “hard work” of British people “paying off” and that “the era of austerity is finally coming to an end” were widely welcomed.
But – which parts of his 72-minute speech do you need to take note of? We’ve done the hard work and have put together a few of the key points which small to medium sized enterprises need to know about.
- Small business apprentice contribution funds have been halved to 5% as an incentive to grow their workforce.
- Small businesses with a rateable value below £51,000 will see their bill cut by a third from April 2019, and the small business VAT threshold frozen for two years.
- The present VAT registration limit (£85,000) and deregistration limit (£83,000) will continue to apply for a further two years; until 31 March 2022.
- There is no change to the rate of Corporation Tax, which stays at 19% for the financial year beginning 1 April 2019.
- The National Living Wage is to rise by 4.9 per cent from £7.83 to £8.21 in April 2019.
- Fuel duty will be frozen for the ninth successive year.
- A pledge of up to £1bn of government money was confirmed to guarantee loans to SME housebuilders via the British Business Bank.
- The qualification criteria for Entrepreneurs Relief are to be tightened from April 2019. In particular there will be a new minimum two-year period of ownership in order to qualify for the 10% rate of capital gains.
- Personal allowance for individuals increases to £12,500 for 2019/20 and 2020/21. The basic rate limit for income tax increases to £37,500. This means that the government’s pledge of a £50,000 higher rate threshold will have been achieved.
The changes to off-payroll working recently introduced to the Public sector are to be extended to medium and large private businesses companies from 2020. Small businesses will be exempt. The responsibility for deciding whether off-payroll rules apply will move from the worker’s personal service company (PSC) to the entity engaging the PSC. If the experience of PSCs in the Public sector is anything to go by there will be a dramatic fall in the employment of PSCs by large and medium sized companies.
The Chancellor added that there will be a full Spending Review next year and that he will consider a Spring 2019 Budget should there be a no-deal Brexit. And if it does all go down the pan, he also announced 100% business rates relief for lavatories available for public use!
Are there any crucial SME issues that this budget didn’t tackle? Could the Chancellor have done more for family-run businesses and the self-employed? Let us know thoughts.
And if you have any questions about how the Budget might affect your business, you can email firstname.lastname@example.org for advice.