Autumn statement 2017 - Key points for small businesses
At Payzone we think that staying informed and in the know on key developments in the wider world is vital for any business. This is nowhere more relevant than in a Government budget. Announcements in any type of Government statement or budget can often have wide implications for businesses. An initiative or a policy could potentially help or hinder a particular sector or industry in a significant way. And with Brexit looming on the horizon, the decisions made by the government will be more important than ever as the UK heads into uncharted territory. So what exactly were the key points from Chancellor Philip Hammond’s Autumn Statement?
Business rates to change
Perhaps the most significant announcement that was made concerned a major change to business rates - a subject which is often sighted as a strong hindrance towards business growth. Business rate taxes on commercial properties will now be judged through a different inflation indexing system. The previous way this was done was through something known as RPI. This will now change towards CPI - a much more lenient system. According to the Chancellor, it is estimated that this move will save businesses around £2.3bn. If that is the case, this will be a welcome announcement for the thousands of businesses across the country who have felt the pinch of burdensome business rates.
VAT threshold frozen
The current VAT threshold of £85,000 will remain the same at least for the next two years starting in April 2018. Britain currently has one of the highest VAT thresholds in the world. Crucially plans are in place to reform the current system and create something which will better incentivise growth. There were fears that the threshold might be reduced but yesterday's freeze ensures that many small businesses will be kept out of VAT registration - which will undoubtedly be a relief to many.
£500 million to go into tech startup space
The growing influence of small businesses who utilise sharing platforms and other technological innovations such as AI (artificial intelligence) and machine learning is now undeniable. The government has clearly recognised this, with a significant contribution going towards various initiatives already in place. The Tech City UK initiative will now be known as Tech Nation. This will ensure that more ‘hubs’ will be rolled out across the country to support aspiring tech startups. A new national advisory board for artificial intelligence will also be created to help support businesses in this field.
National living wage rise
For business owners with employees this is crucial information. The previous minimum wage of £7.50 an hour will rise to £7.83 an hour. This rise will be introduced in April and will ensure that workers, who work a 38 hour week, will see a £600 a year pay rise - which is applicable to workers who are over the age of 25. So when you factor in your employee's earnings this development is important to bear in mind.
Transforming cities fund
The wide economic gap that exists between London and much of the country is something that has to bridged. In this Autumn statement, it was announced by the Chancellor that a fund will be created with the intention of helping rejuvenate regions of the country. Better transport links will be provided to help reduce congestion and improve connectivity between various cities. Regions to benefit include Cambridgeshire, Peterborough, Liverpool, Greater Manchester and the West Midlands. Local authorities will also stand to benefit from over £1 Billion of government investment in various infrastructure projects.
“Brexit means Brexit” is the phrase that was bandwagoned in the aftermath of leaves shock win in the summer of 2016. And it seems the government is prepared for this to happen, even if the UK are to get no deal from their negotiations with their EU counterparts. £3bn has now been allocated to prepare for a no deal scenario with the European Union. Businesses will now need to get themselves ‘Brexit ready’ as there is clearly an unwavering determination for this to happen. So whatever it is you feel you need to do to get ready for this it's probably a good time to get started.
We hope that you found some good points from this budget and that your business can benefit from some of the measures that have been put in place.
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