Budget 2018: Quick Glance for business
I know, I know, Yawn! How boring. However budget 2018 is a big deal and can make quite a difference to your personal and business finances.
So Lets get a need to know recap of what went down in this budget (although bear in mind all may change with Brexit looming in the air)
There was at least some positives for small business owners but not as much as many had hoped.
Personal Tax & Wages
- Personal allowance to rise from £11,850 to £12,500 in April 2019 – a full year earlier than planned
- Higher rate income tax threshold to rise from £46,350 to £50,000 in April 2019 – quite a jump
- After that, both thresholds will rise in line with inflation
- National Living Wage will increase by 4.9%, from £7.83 to £8.21 an hour, from April 2019.
State of our economy
- Era of austerity is “finally coming to an end”, the chancellor says
- Growth forecast for 2018 downgraded to 1.3% from 1.5% in March, due to impact of bad Spring weather
- However forecast for 2019 raised from 1.3% to 1.6%
- 3.3 million more people are now in work since the year 2010 and another 800,000 more jobs are forecast by 2022.
- Wages growth at its highest in nearly a decade
Business & Digital
- A new 2% digital services tax on UK revenues of big technology companies, from April 2020 (not well received in the US)
- Only profitable companies with global sales of more than £500m will be liable
- Annual investment allowance to be increased from £200,000 to £1m for two years – good news for small businesses with large expenditures planned
- Contribution of small companies to apprenticeship levy to be reduced from 10% to 5% – Nots ure what this is? Read more here
- £900m in business rates relief for small businesses and £650m to rejuvenate High Streets
Business bits in more detail:
IR35 rules for private sector
IR35 is to be introduced to the private sector in line with the rules that apply as of now for the public sector. The new rules which will not apply until April 2020 will not affect small businesses instead applying only to medium and large companies. However in typical fashion no clarification has been made on what “small” means in this case so it is not yet clear exactly who will be exempt.
Vat threshold frozen
Hoping to provide small UK businesses with some form of certainty the VAT thresholds have been frozen where they are for two years from 2020. There was talks of the registration threshold being lowered to £50,000 so that worry for companies around those levels has been been pushed back a good few years.
If you are unsure on VAT threshold you can read more here.
Making Tax Digital
Making Tax Digital is still on course to arrive in April 2019 and only VAT registered businesses are affected by this first staging date. All middlers clients are already fully setup to deal with Making Tax Digital so no worries there.
Business rate relief
Amid the struggling high street shops and many call outs for the expensive rents and rates of running shops on the high street some good news has arrived. The government will cut business rates by up to a third for small retailers with a rateable value of £51,000 or less. Expected to benefit 90% of independent shops, pubs and restaurants, cutting bills by estimated £8,000.
Are you better or worse off
That’s not always an easy question to answer due to the complexity your income sources can have. However to get a good idea of how the budget may have impacted you personally the BBC have again produced their 2018 budget calculator here:
BBC Budget Calculator
And to delve into this years budget more you can read more at the gov site here:
Gov website – Budget 2018
Lastly here’s this years budget in full:
The full 2018 budget
Any questions on the 2018 budget?
If you have any questions or need any advice on any of the issues above, please do not hesitate to get in touch with your account manager of book a call with the link in the menu above, or drop us an email at [email protected].
