What the budget means for you

In his 2018 Autumn Budget, Chancellor Philip Hammond provided a number of announcements relevant to small businesses, including increased support for the UK’s High streets. Below we take a look at what the budget could mean for your business.

Help for the high street

The Chancellor announced a variety of measures aimed at giving short and long-term support to the UK’s high streets.

A cut in business rates

If you have a retail property with a rateable value of less than £51,000, your business rates will be cut by a third over the next two years. That’s a saving of up to £8,000, helping up to 90% of independent shops, cafes, pubs and restaurants.

Future high streets fund

£675 million will be made available for local councils to invest in their high streets and help them adjust to the changing commercial landscape. Proposals include better transport links, and converting unused commercial properties to residential ones to increase footfall.

Changes to wages and income tax

The government are continuing to increase wages for low-income workers. If you have staff currently earning the national living wage (for over 25’s) or national minimum wage (under 25’s), these will be the new hourly rates from April 2019:

Year   25 and over     21 to 24    18 to 20    Under 18    Apprentice 
April 2018 (current rate) £7.83 £7.38 £5.90 £4.20 £3.70
April 2019 £8.21 £7.70 £6.15 £4.35 £3.90

The thresholds for income tax are also being tweaked. Continuing the government’s policy of the last few years, the personal tax free allowance is edging up, as is the higher rate tax threshold. Here’s what they’ll be for 2019/20:

Personal allowance – £12,500

Basic rate (20%) – £12,500-£50,000

Higher rate (40%) – £50,000-£150,000

Additional rate (45%) – £150,000+

Annual investment allowance has been increased

Jumping from £200,000 to £1 million, there’s been a big increase in the annual investment allowance (AIA) for the next two years. AIA allows your business to purchase new plant or machinery without paying tax on it (up to the new £1 million limit). For more information on what qualifies, visit www.gov.uk.

A cut to the apprenticeships levy

The contribution small businesses make to the apprenticeships programme has been halved, reducing the levy to 5%.

There were also further announcements to strengthen the role of employers in building out the programme. These include funding to increase the number of employer-designed apprenticeships standards, and ongoing work to find and fill skills gaps.

New tax on plastics

If you produce or import plastic packaging, you’ll face a new charge if that plastic doesn’t contain at least 30% recycled materials. This was the only ‘green’ tax announced by the Chancellor, although he has said he may revisit the issue in future..

Fuel and beer duty frozen

Fuel duty has been frozen for the 9th year in a row, which is good news if you’re running a fleet.

Duty on beer, cider and spirits has also been frozen, helping pubs, breweries and distilleries. Not such good news if you’re more of a wine fan though, as duties will be rising in line with inflation.

This article is for your information only. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice. If you want to find out more on any of the above topics, we suggest talking to a financial advisor.