For any small business owner who doesn’t have the time to sift through Autumn Statement 2016 story after story and page after page, we have a handy 500-word summary with everything you need to know.
£1bn broadband investment
Small businesses struggling with poor internet connections could soon be able to access a better connection after the chancellor announced an investment of more than £1bn into building out the UK’s digital infrastructure.
Wanting to make sure the UK is a “world leader” in 5G internet, Hammond said the government would be pursuing improvements in speed, security and reliability. Additionally, 100 per cent business rate relief will be provided for the next five years when it comes to new fibre infrastructure.
National Living Wage increase
Employers with staff on the lowest legal wage will now have to pay more after Hammond revealed in the Autumn Statement 2016 that the National Living Wage, the replacement to the National Minimum Wage, will go up from £7.20 to £7.50 in April 2017.
Back at the turn of the millennium the National Minimum Wage was £3.60. However, the Labour and Conservative governments have taken steps to increase it – with Labour planning for it to be £10 if the party comes back into power.
The tax-free personal allowance has also been increased, and will sit at £12,500 by the end of the current parliament.
Increase to Export Finance funds
Small businesses looking to engage with export activities will soon have access to better financial assistance. UK Export Finance, an organisation with a mission to “ensure that no viable UK export fails for lack of finance or insurance”, is set to double in capacity.
This involves a double of “total risk appetite” to £5bn, increasing capacity for support in individual markets by up to 100 per cent and making sure more currencies are pre-approved for UK Export Finance assistance.
The government is shutting down what it called “inappropriate use” of the VAT flat rate scheme put in place to help small companies. The VAT flat rate scheme is an alternative way for small businesses to work out how much VAT to pay to HMRC each quarter.
Recently The Guardian revealed temp recruitment agencies were generating millions of pounds for participants by exploiting VAT rules that were originally designed to benefit very small businesses.
Instead, the government used the Autumn Statement 2016 to introduce a new 16.5 per cent rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses. This will, it added, help “level the playing field” and maintain the accounting simplification for the small businesses that use the scheme as intended.
Any budding entrepreneurs looking to carve out a business in the buy-to-let space could soon see fees previously levied on tenants transferred to them.
The government will be banning letting fees for private tenants “as soon as possible” after they have been seen to “spiral” despite regulation attempts.
The chancellor announced in his Autumn Statement 2016 speech that the doubling of rural business rate relief – completely removing the burden of business rates – would bring a “well-needed” tax break to small businesses that are the “lifeblood of their communities”.
Increasing rural business rate relief to 100 per cent is expected to save qualifying businesses up to £2,900 every year in business rate payments.
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