VAT threshold remains unchanged, for nowPhilip Hammond has decided not to lower the threshold at which individuals begin paying VAT on their income. He?s left it where it is at ?85,000 a year (for the next two years, at least) amid heavy criticism from small business organisations. Bodies such as the FSB have welcomed the news, having campaigned against VAT reform on the grounds that it would massively drain smaller firms? resources. However, commentators have warned that Hammond?s VAT threshold freeze may only be a temporary concession, with the government planning a larger overhaul of VAT in 2020. Read more here?
Business ratesThe chancellor brought forward plans to change the way business rates increases in the UK are measured by two years. From April 2018, the Consumer Price Index (CPI), will replace the Retail Price Index (RPI) as the inflation measure used to calculate business rates. It is thought the move will save companies ?2.3bn over three years. Read more here? Elsewhere, the unpopular staircase tax was abolished. Hammond promised that any owner impacted by the staircase tax since its introduction would have their original rates bills reinstated. The chancellor also announced that after the next business rates revaluation in 2022, revaluations will take place every three years as opposed to five years. Read more here
Tax-free personal allowance extendedThe chancellor confirmed an increase of the personal allowance, from ?11,500 to ?11,850, providing a tax-free boost of ?350 a year to those on lower incomes. For the average taxpayer, Hammond claimed the move will result in a ?1,075 overall tax reduction in 2018/19. Read more here
R&D tax relief measures boostedFurther tax relief measures were announced for qualifying small firms that carry out research and development (R&D), and claim the RDEC standalone tax credit. The current RDEC rate is set at 11 per cent of a firm?s qualifying R&D expenditure, but the Budget speech increased the rate to 12 per cent. Read more here
National Productivity Investment Fund extendedHammond extended the National Productivity Investment Fund to be worth more than ?31bn. Some ?20bn of the fund will be allocated to key productivity-boosting business investments, including housing and infrastructure projects. An extra ?2.3bn of the fund will be saved for R&D projects, and ?500m will go towards innovation initiatives in AI, 5G and broadband connectivity. Read more here
British Business Bank given a further boostThe chancellor gave a ?2.5bn funding boost to the BBB as part of a wider ?20bn Patient Capital investment to help fast-growing companies scale up. The funding is intended to encourage greater long-term investment in riskier scale up businesses, and is the largest government commitment yet to the BBB. Read more here?
National Living Wage increase set for 2018In April 2018, the National Living Wage (NLW) ? the hourly rate paid to workers aged over 25 in the UK ??will be increased to ?7.83, Hammond confirmed in his speech. Currently set at ?7.50 an hour, the chancellor claimed the planned increase will see the income of workers on low pay increase by ?600 a year. Read more here Missed the speech? Read the full transcript of Philip Hammond’s Autumn Budget speech here.?
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