In this strange age of minority governments and Brexit negotiations, each new Budget has an added dose of importance – not least for the UK’s small businesses planning for the future.
Philip Hammond, the current Chancellor of the Exchequer, is gearing up for his next budget, which is set to be unveiled on 22nd November. Business owners across the country will be waiting to see what goodies the Chancellor has in store for them that will make their lives easier.
In a year of oddities, by the end of 2017 we will have seen two budgetary announcements, rather than the usual one. The last one took place on 8th March, so here’s a quick recap of what Mr. Hammond said back then and what’s happened in the meantime.
What is the budget and why is it important for business owners?
The budget may not sound like the most glamorous thing in the world, but there’s no denying its importance for the general public and business owners alike. Basically it’s a financial statement that sums up what state the economy is in and what’s going to happen to taxes as a result.
As such, it goes without saying that this announcement is always hugely significant for UK businesses of all sizes. However, at a time when Brexit negotiations are in full swing between the UK and EU following the 2016 referendum, it’s no exaggeration to say that this year’s budget (and those to come in the next few years) will be under more scrutiny than normal as businesses look for stability.
What was unveiled in the spring budget?
March’s budget had some good news for small business owners, with the announcement that unincorporated businesses with annual turnovers lower than the VAT registration threshold have been given until April 2019 to prepare for Making Tax Digital (MTD) – before it becomes mandatory.
MTD is an HMRC initiative designed to make tax management easier and simpler for companies, through the use of software and apps to keep business records and provide quarterly updates. Click here to find out more about MTD.
Alongside this, the Chancellor also revealed that the hefty sum of £435m would be used to support UK businesses which will be hit by business rate changes. What this means is that no small business which is coming out of rate relief will pay in excess of £600 more this year than they did in 2016-17. Additionally, pubs with a rateable value of up to £100,000 are able to claim a rate discount of £1,000, a move that could benefit 90% of pubs.
Mr. Hammond said: “No business losing small business rate relief will see their bill increase next year by more than £50 a month, and the subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher.”
How are UK businesses doing at the moment?
Each budget is a closely-guarded secret to stop news leaking out, but this is particularly true at a time when even the smallest financial revelations can have an effect on the value of the pound. However, it’s also party conference season, which normally brings with it a few big announcements to give the economy a boost.
For example, the Chancellor recently announced that £400m would be put towards improving northern transport routes between major cities and linking them with the ambitious HS2 rail project.
In addition to this, British retailers are reporting positive growth, thanks to the fact that September’s high street sales were the strongest they’ve been for five years. Not only that, but lots of entrepreneurs are choosing to set up shop in the UK, seeing it as a good place to do business. This is supported by the fact that in 2016 660,000 start-ups were established – up by 52,000 on 2015’s figure.
This growth is a clear sign that, despite the questions that exist over Brexit, confidence among consumers and business owners is certainly still high. Hopefully November’s budget will bring even more good news when it’s unveiled.
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