With a 72-minute-long speech, and more than 100 pages of documentation to accompany it, there’s a lot to report from Budget 2018.
Several of the headline announcements brought in changes for small and large businesses alike, with initiatives aimed at improving growth, investment and employment.
Here are some of the main points that could affect your business.
How will small businesses be affected?
High street retailers are set to benefit from one of the key changes announced in the speech, as business rates will be cut by a third for retail properties with a rateable value below £51,000.
Additionally, small businesses employing apprentices won’t have to pay as much towards the cost of training, as their required co-investment will be cut from 10% to 5%.
Will your business be able to invest more?
Another boost for businesses came in the form of a temporary increase to the annual investment allowance, from £200,000 to £1 million over two years from 1 January 2019.
Using this allowance, businesses can deduct the full value of qualifying plant and machinery from their profits before tax.
In another measure, a 2% capital allowance was introduced for new non-residential structures and buildings from 29 October 2018.
What about contractors?
The news wasn’t as positive for some contractors, as it was confirmed that reforms to IR35 will be rolled out in the private sector from 6 April 2020.
These will mirror the reforms that were carried out in the public sector in 2017, with the responsibility for determining employment status shifting to the firm engaging the worker.
However, to avoid burdening small businesses with an administrative burden, the smallest 1.5 million businesses will be exempt from the reforms.
Those who fall within IR35 will have to pay income tax and national insurance at the 12% rate.
Any news on Making Tax Digital?
The Chancellor didn’t mention Making Tax Digital (MTD) in his speech, and no updates were made in the Budget Red Book – but that should mean the scheme is going ahead as planned.
If no changes are made to the current plans, MTD for VAT will become mandatory for most VAT-registered businesses from 1 April 2019.
What are the implications of Brexit?
Despite the looming prospect of the UK’s scheduled departure from the EU in March 2019, there were few mentions of Brexit in the Budget.
This provided little reassurance to businesses that are concerned about the potential impacts of leaving the EU without a deal in place.
Stephen Martin, director-general of the Institute of Directors, said:
“While we hope the Chancellor’s confidence that there will be a Brexit deal is well-placed, firms will be deeply disappointed to see no funds have been allocated to helping them map out potential outcomes.”
As the Chancellor reserved his right to upgrade the Spring Statement to a full fiscal event if necessary, the possibility remains that a no-deal Brexit will prompt another Budget.
Contact us to discuss Budget 2018.