In his Budget speech yesterday, Philip Hammond described his Budget as one for hard working families; for strivers, grafters and carers. On several occasions he repeated the phrase “austerity is coming to an end” (not “at an end” as the PM had said), before announcing a series of measures he hopes will generate a bright and prosperous future for the UK.

But not many rabbits emerged from hats and he stressed the need for discipline to remain.

We hope you will find our BUDGET SUMMARY of interest and we have highlighted the main points that affect business owners below:

  • National Living Wage will increase to £8.21: From April 2019 the National Living Wage will increase from £7.83 an hour to £8.21
  • The tax-free Personal Allowance will rise to £12,500 and the Higher Rate Threshold will increase from £46,350 to £50,000 in April 2019
  • A package of measures to stimulate business investment includes an increase in the Annual Investment Allowance from £200,000 to £1 million for two years from January 2019; targeted relief for the cost of acquiring IP-rich businesses; and a permanent tax relief for new non-residential structures and buildings
  • Research and Development tax relief for small and medium businesses will change where a company claims a repayable tax credit. The repayable credit will be restricted to 3 times the company’s PAYE and NIC liability for the year
  • Start-Up Loans funding to be extended to 2021, helping 10,000 entrepreneurs. Contribution of smaller firms to apprenticeship levy to be reduced from 10% to 5%
  • Employment Allowance to be targeted at small and medium businesses with an Employer NICs bill under £100,000 a year from April 2020
  • Lettings Relief to be limited to properties where the owner is in shared occupancy with the tenant from April 2020 and changes to Principal Private Residence Relief reducing the final period exemption to 9 months
  • Entrepreneurs Relief retained, but minimum qualifying period extended from 12 months to two years and additional requirements as to the rights attaching to the shares being sold. The shareholders must also be entitled to at least 5% of the distributable profits and net assets of a company to claim the relief
  • Threshold for VAT registration to remain unchanged for a further two years.
  • Reforms to IR35 off-payroll rules to be extended to large and medium-sized firms in the private sector from April 2020.  This will shift the onus on operating IR35 from the individual to the organisation engaging the worker
  • Government co-funding totalling £675million for a Future High Streets Fund to support councils in improving their high streets
  • Business rate bills cut by one-third for the next two years for all retailers in England with a rateable value of £51,000 or less, delivering an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes
  • Stamp Duty abolished for all first-time buyers of shared ownership properties valued up to £500,000, applied retrospectively to the date of the last Budget
  • £500million for the Housing Infrastructure Fund, designed to unlock a further 650,000 homes; a new wave of strategic partnerships with nine English Housing Associations to deliver 13,000 homes; up to £1billion of British Business Bank guarantees to support smaller housebuilders

If, on digesting the Budget small print in detail, we find issues we believe are relevant to business owners, we will be highlighting them. In the meantime, if you have any queries raised by the Budget, please do get in touch.