Well, we’ve sat through the whole Budget Speech and digested all the announcements and what do we think overall?
Apart from the jokes it was a very dull Budget! This Budget was a ‘steady as we go’ with no eye catching changes being announced.
Below is all the Budget information you’ll need as a business owner with our thoughts and tips included.
Fuel duty & cars
For the 8th year, fuel duty was frozen, which is a welcome recognition of the reliance of small businesses on running their operating fleets.
It was also announced that there would be no benefit in kind charges levied on those charging their electric vehicles at their place of work – good news for those who’ve bought electric vehicles for tax efficiency.
The dash for diesel is being reversed as the diesel surcharge on benefits in kind is being increased by an additional 1% to 4%. These changes are solely for cars and are not attacking ‘white van’ man/woman.
With the changes previously announced to benefits in kind on hybrid cars, people should take extreme care when changing company vehicles to ensure they minimise their benefit in kind.
R & D tax credits
The R & D tax credits for large companies will increase from 11% to 12% from 1st January 2018. More importantly, the budget for R & D tax claims will be increased by a further £2.3 billion, which demonstrates that the potential for R & D claims to be made continues to grow.
This means that all companies should focus their efforts on considering what, if any, aspects of their activities qualify for this valuable relief.
Given that R & D limits are set by the EU, post Brexit we anticipate a Brexit R & D dividend as the UK seeks to establish its position at the forefront of technological change.
The expected changes to the VAT registration threshold failed to materialise, with the threshold remaining at £85,000 for the next two years. This is a welcome relief for small businesses who would have faced additional paperwork and real costs.
However, watch this space in two years’ time, where we expect the threshold to be reduced significantly.
The Chancellor announced the axing of the staircase tax which affected thousands of small businesses that occupy split workplaces.
In respect of business rates, the Chancellor has sought to slow the rate of increase of these rates and have more regular revaluations, in order to avoid steep rises.
It seems the Chancellor has responded to small business concerns on these points.
Stamp Duty has been abolished for first time buyer purchases under £300k. For purchases up to £500k the first £300k is also exempt for first time buyers.
There was a modest increase in the National Living Wage to £7.83, which was a smaller increase than many businesses had feared. It seems that for once the Chancellor has tried to balance the needs of small businesses and their employees as much as possible.
Given the Governments relative success in attacking public sector IR35 arrangements, it looks like they will seek to roll these changes out in 2018 to the private sector. For contractors or businesses engaging contractors, the net could be closing in, so now is the time to contact your adviser and review your contracts and working arrangements.
The crackdown on marketed tax planning schemes and the APN (Accelerated Payment Notices) has generated a substantial amount of cash for the Government. Now, the Government is planning to extend the crackdown to any planning pre December 2009 and this could lead to significant cashflow problems to businesses affected.
Today’s announcements are positive in the main, with some of the predicted changes reported earlier in the week failing to materialise, such as the changes to the tax free amounts for dividends. This is good news for business owners and has not hit their pockets quite as much as expected.
So has the Chancellor done enough for UK business? What are your thoughts?