What does the Autumn Statement mean for your business?
Last week the Chancellor Philip Hammond delivered his 2016 Autumn Statement. Within the reform were a number of changes that will undoubtedly have an effect on how businesses are run.
While the forecasts for growth were down from previous predictions (2.1% in 2016, 1.4% in 2017 and 1.7% in 2018) the Government have pledged a number of investments to help business.
Hammond expressed concern that start-up businesses were not being given time to grow before being bought out by larger companies. To address this, and attempt to facilitate the growth of small businesses, a £400 million investment into the British Business Bank was pledged.
Furthermore there was concern over the UK’s lack of productivity compared to a number of EU competitors. Therefore, the Chancellor announced the establishment of a £23 billion National Productivity Investment Fund which aims to bolster innovation and infrastructure.
A ‘Business led recovery’
The focus on a ‘Business led recovery’ also saw the fall of corporation tax from 20% to 17%. A postponement in the rise of fuel duty will also save those who drive for work an average of £130 a year, or £350 for those who drive vans.
The drop in corporation tax follows the announcement of the Government’s plan to ensure that it is the lowest rate in the G20.
Other announcements will also be music to the ears of those who run small businesses too.
A £1 billion investment in digital infrastructure, £2 billion pledged towards research and development funding by 2020 and a 100% business rate relief on those using full-fibre digital infrastructure underline the key topics addressed in the statement.
Changes afoot for self-employed people
There will also be change for those who are self-employed too. Class 2 National Insurance Contributions, which had previously included those who exceed the £5,965 Small Profits Threshold a year as a self-employer worker will be scrapped with Class 4 NICs undergoing a reform. Whether this means those people will be better off financially in the long run is unsure, though it will undoubtedly make things simpler with just one class contribution to be paid.
One extra cost that businesses could face in the New Year is a 30p increase in the National Living Wage. This means that the minimum over 25s can be paid will rise from £7.20 to £7.50 a hour in April next year.
The true extent of these changes won’t be felt until well in 2017, but the Autumn Statement outlined show a real desire to help small businesses grow and improve the overall business productivity in the UK in the years ahead.
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