Andy's View: Spring Budget
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We don’t see too much in the budget to cheer for small business. And that is not a good thing.
Chancellor Philip Hammond delivered his spring budget today which was full of interesting but not earth shattering changes.
The change that prompted the most column inches, or I guess tweets would be the measure now, was the changes to national insurance contributions for self employed people. So much so in fact, that a few days later, the chancellor made a big u-turn and changed his mind. This change has been widely criticised as a mistake from an otherwise cautious chancellor.
Growth is on the up is the message. The UK economy is forecast to grow 2% this year and at a slightly lower rate than that for subsequent years. Our economy appears to be in a good place, although we will see what Brexit has to say about that!
Dividend tax has been changed, in a further blow to owner-managed businesses. The tax-free level of dividends will reduce from £5,000 to £2,000 from April 2018.
However, the annual tax free allowance has been increase from April 2017 to £11,500 as promised and will continue to rise to £12,500 by 2020. While, making tax digital has been deferred for another year for businesses under the VAT threshold.
These upcoming changes still represent a huge additional administration burden on small businesses and I am sure they will be looking to their accountants to help them with this. Costs are sure to go up.
Business rates and increases in rateable value have also been a highly contentious issue. The Chancellor introduced a package of £435m to try to soften the blow for those businesses hit the most. However, we are sure there will be a large number of businesses that will become unviable following huge rises in rates for some businesses.
Overall, we don’t see too much in the budget to cheer for small business. And that is not a good thing. We need support for small business to keep our economy on the up and for job creation to continue. Business owners are very unfairly attacked regularly in the media for being bad bosses and for not looking after people but that is not my experience of business owners.
A huge majority of them are decent, extremely hard working people who take huge risks and put themselves under extreme stress to deliver for their customers, their staff and their families. Looking after our business owners and entrepreneurs is vital to maintain our UK economy and our spirit.
If you would like to discuss any of the changes in the budget or would just like some support for your business, please do get in touch.