Budget 2017 - everything small businesses need to know
The important stuff for small businesses from Phillip Hammond's Budget
At 12.30pm today (8 March 2017) Chancellor Phillip Hammond took centre stage in the House of Commons to deliver the last ever Spring Budget. Despite admitting that growth forecasts for 2018 to 2020 have been cut, he says the future is bright for the British economy.
Other key announcements included £2 billion for social care, a new sugar tax to combat obesity and a 20% roaming charge hike for the privilege of using your mobile abroad. Good news for a social care sector in crisis. Bad news for sweet toothed holidaymakers.
But what does the Budget mean for the UK’s small businesses? More specifically, how does the government plan to save the 520,000 businesses facing potentially fatal rate increases?
£435 million olive branch
The Chancellor has devised three measures to ease the burden of business rate increases. Combined, they amount to cuts of £435 million.
The three measures are:
A £300 million fund for local authorities to disseminate to businesses hit hardest by rate increases, on a discretionary basis.
A cap for any business coming out of rate relief which prevents additional costs exceeding £50 per month.
A £1,000 discount on rates for any pub with a rateable value of less than £100,000 – which accounts for 90% of English pubs.
At £435 million it's a sizeable pot, but business bodies aren’t exactly hailing Hammond as the small business saviour.
“The new money is a direct and much-needed response to those facing astronomical hikes in their business rates”, said Mike Cherry, Chairman of the Federation of Small Businesses.
“Measures that mitigate the short-term impact of business rate rises are little more than a sticking plaster”, said the British Chamber of Commerce. "The radical changes needed to improve the broken business rates system will have to wait for another day."
Taxes to rise for self-employed
For the sole traders and the one-man bands there are tax increases inside Phillip’s red case.
The self-employed paying the main rate of class 4 National Insurance contributions will see an increase of 1% to 10% in April 2018 and 11% in April 2019.
On average, the rises will cost those affected 60p a week.
For many, the announcements made today will lack the level of detail needed to plan for the future.
Return to the Biz Hub for future Budget announcements and expert advice on how they affect small businesses.