What the 2017 Spring Budget Means for Businesses

This was the first (and last) Spring Budget for Chancellor Philip Hammond following the announcement at last year’s Autumn Statement that the main budget will be moved to autumn from this year. With a warning that the Spring Budget will no longer be a "major fiscal event", most were not expecting any ground-breaking announcements. Despite this however there are some changes which will affect businesses up and down the country.

Hammond put business at the forefront of his speech, stating his desire to make Britain the ‘best place to start and grow a business.’ So what do the new measures mean for you and your company? Here are the key takeaways for business owners:

• In a welcome move for small business owners negatively affected by the forthcoming changes to business rates, Hammond announced a three point plan to help ease the burden on those hardest hit:

1. Those businesses losing small business rate relief will benefit from an additional cap. This ensures their rates will increase by no more than £50 a month.

2. Pubs will receive a £1,000 discount on their business rate bill. This will be given to all pubs with rateable value of less than £100,000 (90% of all pubs in the country.)

3. A £300m fund will be allocated to local councils in order to provide discretionary relief to those businesses most affected by the increase in business rates.

It is claimed that these measures amount to a total £435m package to help small businesses.

• As most predicted, Hammond announced plans to increase the level of NICs for the self-employed. He claimed the different levels paid by employees and the self-employed can no longer be justified in light of the new state pension which both the employed and the self-employed are entitled to.  As a result, Class 4 NICs will increase for the self-employed to 10% in 2018, increasing to 11% by 2019. It is claimed this is at an average cost of 60p per week per self-employed person, and it is anticipated it will raise an additional £145m by 2021-22.
  
  
• Attention was then turned to those working through their own companies and the issue of corporate taxation. It was suggested that the difference in the level of tax and NICs paid by an employed worker and someone working for their own company is unfair and must be addressed. Consequently the tax-free dividend allowance will be reduced from £5,000 to £2,000 effective from April 2018.
  
  
• The introduction of quarterly reporting will be delayed by one year for those businesses with turnover below the VAT registration threshold.
  
  
• Further support was promised for the oil and gas industry. Details were minimal, but a formal discussion paper was promised in due course.