This was Chancellor Philip Hammond’s first major announcement and it included some key changes for businesses. This is what I believe business owners need to know about Hammond’s speech.
The tax free personal allowance will rise to £12,500 and the higher rate threshold to goes up to £50,000 by the end of the parliament. Personal allowance will rise in line with inflation from that point.
Corporation tax will fall to 17 per cent, in line with the government’s existing plans. It will also implement the business rates reduction package.
The Universal Credit taper rate will be cut, in a tax cut for those in receipt of the benefit.
The Chancellor also signalled a crackdown on “inappropriate use” of the VAT flat rate scheme, but it is not yet clear what form this may take.
The National Living Wage will rise from £7.20 to £7.50 from April 2017.
The National Living Wage will rise from £7.20 to £7.50 in April 2017, worth over £500 a year to a full-time worker
The government will double the capacity of UK Export Finance, which will help exporters win and fulfill contracts.
Investment in growing firms
The Chancellor’s concern that UK startups are bought by larger competitors before being given the chance to grow to scale prompted him to combat this by announcing a new investment of £400 million in the British Business Bank. This is aimed at unlocking a total investment of £1 billion.
The Chancellor pledges changes on infrastructure spend as follows:
£1.1 billion investment in local transport networks in England
At least £1 billion on digital infrastructure including 5G and fibre broadband
£1.8 billion for the English regions
The Chancellor repeated concerns about UK productivity, raising the point that it lags behind major EU competitors. Therefore, Hammond announced the establishment of a £23 billion ‘productivity investment fund’ which will focus on projects in innovation and infrastructure.
The Chancellor also announced that investment in research and development will rise by £2 billion by 2020.
To help businesses combat the falling pound and rising oil rates, the fuel duty rise will be postponed again. Hammond suggests this saves the average van driver £350 a year, and the average car driver £130.
Askews Accountants can advise you on the changes resulting from The Chancellor’s 2016 Autumn Statement. We can discuss how these changes will affect your business so that you understand which options are best for you in complete confidence.
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