Philip Hammond tackled the thorny issues of business rates with a £435 million war chest and three key measures: a monthly £300 million discretionary relief fund; a £1,000 discount for virtually all pubs; and a £50 cap on monthly bill increases.
It looked like self-employed workers had the most to lose from the budget, with a 2% hike in National Insurance. However, this has been dropped following widespread opposition. Mike Cherry, Chairman of the National Federation of Self Employed & Small Businesses, had called it “a £1 billion tax hike on those who set themselves up in business.”
However, the self-employed workforce faces swingeing cuts to the tax-free dividend allowance – this will be reduced from £5,000 to £2,000 from April 2018. This raises concerns for businesses around staffing and even future growth.
The good news for smaller businesses is that digitization of taxes is being put on the backburner. The new quarterly reporting requirement will be delayed by a year for those businesses with a turnover below the VAT threshold of £83,000.
Mothers returning to work will also be given a helping hand, with £5 million pledged to promote “returnships”, helping people back into employment after a career break. Bigger businesses are being rewarded with a corporation tax cut to 19% in April 2017, and then to 17% in 2020.
Budget: The good…
- £435m in business rates relief measures
- £40,000 higher rate tax threshold
- 19% corporation tax
- £11,500 personal allowance
- £7.50 National Living Wage
And the bad…
£3,000 cut in the tax-free dividend allowance