With speculation over recent weeks suggesting bad news for small businesses, it was pleasing to see that, unlike Apple’s September events, the leaks weren’t very accurate!
Whilst there was very little specifically for creatives there was a lot for small businesses to smile at…and we certainly don’t mean Philip Hammond’s terrible mid-speech jokes!
Of course the really good news comes in the form of a new 50p design to celebrate BREXIT….everyone’s jumping for joy at that one!
One for everyone!
To kick-off, there is some good news for individuals. The personal allowance (the tax free bit) will increase from £11,850 to £12,500, a year earlier than expected. Alongside that, the amount at which you start paying Higher Rate Tax of 40% will increase from £46,350 to £50,000.
For someone currently being paid a salary of £50,000, next year you’ll be £860 better off (or a new 11” iPad Pro!).
A thought for Making Tax Digital
The VAT Threshold has been kept at £85,000 for the next two years. With speculation it would be reduced this is a ‘win’ for businesses. However, by freezing the threshold more businesses will fall into VAT and therefore Making Tax Digital.
For Entrepreneurs and Startups
The chancellor commented on the importance of entrepreneurship to the UK economy and the following were announced to support them:
Entrepreneurs’ Relief
A tax relief available on the sales of shares where certain circumstances are met; this has been retained but the period shares must be held for to gain relief extended from 12 to 24 months.
Startup Loans extended
The Government funded loan scheme has been extended until at least 2021.
Business Rates relief
For properties with a rateable value of £51,000 or less, rates will be cut by a third over the next two years.
For Employers
With unemployment still falling there is further support for employers:
Employment Allowance
From 2020 access to the employment allowance (the £3,000 a year ‘free’ Employers National Insurance allowance) will be restricted to businesses with an annual national insurance bill of under £100,000. 93% of small businesses will not be affected.
Apprenticeship Levy
The government are reducing the amount some companies must pay to co-fund the apprenticeship scheme from 10% to 5%
Delay to IR35
IR35 is legislation to catch ‘disguised employees’, i.e. where a freelancer or subcontractor really has the relationship of employee but has used self-employment or a company to avoid paying tax in that way. Initially expected to come in from 2019, the roll out for Private Businesses has been postponed to 2020 and only for Medium and Large businesses.
For the bigger businesses
Digital Services Tax
With a huge amount of press coverage on large businesses seemingly avoiding tax, this one is no surprise but it’s only for the biggest of businesses, with a required turnover of £500 million.
An additional tax of 2% will be charged on all sales to UK consumers ensuring multinationals can’t route profits via offshore companies.
Annual Investment Allowance
Annual Investment Allowance affects all businesses, it’s the amount you can spend on assets and get 100% tax relief in the first year. The reason we highlight this as being for big business is that the annual limit is being increased from a significant 250,000 to a whopping £1 million. There won’t be many small businesses using all of that up!
We know it’s all tax but this is one of the more interesting Budgets for some time, with some good news for business owners. It all comes with a caveat from the Chancellor that should BREXIT be unfavourable it may all change but, if anything, that may mean further good news for business as the UK fights to continue to attract investment.
If you want to discuss how this might affect your business please do give us a shout below!
