As Philip Hammond shared the 2018 Autumn Budget and thanked the British public for their hard work, he had a number of announcements for small business owners – on everything from personal tax allowance to business rates.
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The Chancellor opened his Budget 2018 speech by saying it would be “a Budget for hardworking families… the strivers, the grafters, and the carers who are the backbone of our economy.” But what does this mean for small businesses?
Personal tax allowance
Personal tax allowance is the amount you are allowed to take home without paying tax. Anything you earn above that is taxable at a varying rate dependant on your total income.
The chancellor announced that personal tax allowance will be raising to £12,500 for basic rate tax payers, and £50,000 for higher rate tax payers in 2019.
A cash injection for Britian’s ailing high streets
If you’re a bricks and mortar shop, the Chancellor’s proposed Future High Streets Fund may well be of interest to you.
In the Budget, Philip Hammond announced £675 million worth of co-funding for local councils to plan the future of their high streets.
He suggested this could include converting commercial premises into residential ones to increase footfall, and claimed that while it could take time to adapt, the rise of online shopping meant that the changes we’ve seen in recent years is irreversible.
Up to £8,000 of savings for independent businesses
The Chancellor also declared he will be cutting the business rates bill for the smallest of small businesses. Businesses with a rateable value of £51,000 and under will see their bill cut by a third over a two-year period.
According to the Budget announcement, this will lead to up to £8,000 worth of savings.
For next 2 years, Chancellor announces that all businesses on the high streets with a 51,000 rateable value or less, their business rates bills will be cut by a third. FSB have been calling for support to small firms on our high streets. #Budget2018 #FSBhighstreets pic.twitter.com/OOASK4KYL2— FSB (@fsb_policy) October 29, 2018
Will the new digital services tax impact small businesses?
Ahead of the Budget, there was a lot of talk about a digital services tax, which had some online retailers worried about their position.
However, the tax announced today will only apply to to businesses that generate millions in global sales, but it remains to be seen whether this tax will have an impact on businesses that sell through sites like Amazon and Ebay.
Green taxes on UK small businesses
While the Chancellor made mention of the environment in his Budget announcement, there was only one tax announced – companies manufacturing plastic that is less than 30% recycled material will face a levy.
He also said that he had considered a plastic cup tax, but decided that it wouldn’t make a substantial change. He will, however, continue to monitor progress, and may introduce another tax if things don’t improve.
Autumn Budget 2018 announcements: a summary for small businesses
In summary, here are the major points for small businesses to be aware of in the wake of the 2018 Autumn Budget:
- Personal tax allowance will be raised to £12,500 for basic rate tax payers, and £50,000 for higher rate tax payers in 2019
- £675 million will be put towards a Future High Streets Fund
- Business rates bills for businesses with a rateable value of £51,000 or less will be cut by a third over two years
While this is some of the biggest news that will impact small businesses in the UK, the Chancellor announced a number of other measures you might want to keep your eye on. These included:
- Annual investment allowance will be increased from £200,000 to £1 million for two years
- Small businesses will now only have to contribute five per cent to the apprenticeship levy
- New mandatory business rates relief for all toilets made available to the public, whether publicly or privately owned
- A £30 billion package for England’s roads, including repairs to bridges and potholes
- Fuel duty will be frozen for the ninth year in a row, saving car drivers around £1,000 and van drivers around £2,500
- Beer, cider and spirits duties will be frozen, though wine duty will rise with inflation and tobacco duty will continue to rise by inflation plus two per cent
- The Greater Manchester area will see a new fund to help small businesses improve their skills
- The VAT threshold won’t change
- The national living wage will increase to £8.21
What do you make of this year’s Autumn Budget? Let us know in the comments.