The Budget takes place this Wednesday 8 March, with Chancellor Phillip Hammond announcing what we can expect for the UK’s finances over the next few months. This is always a time for speculation, as people try to anticipate what will be announced. We’ve been keeping our ears to the ground to keep you updated as to what small business owners might expect, and below we have provided five things to look out for. As a bonus, we’ve also found three areas speculated on that the Chancellor probably won’t change.
Five things to expect
1. Business rates
Something that has been making headlines for the last few weeks is a change in business rates. Business rate re-evaluations are scheduled to come in on 1 April, changing the amount businesses pay for the rental value of the property they occupy. The effect of the re-evaluation will mean a reduction for some businesses, but large increases for many others. In the face of pressure from businesses, it is expected that the Chancellor will announce a measure to help those businesses which may be worst affected by the re-evaluation.
2. Small business broadband
Many businesses are now using the internet to help them succeed and get their products and services out to a wider audience than ever before. However, some areas of the UK still suffer from poor broadband internet connectivity, which hinders businesses in those areas. To help those businesses, a plan that is likely to be announced in the Budget is that small businesses will be given broadband vouchers. It is hoped that this would lead to businesses pooling their vouchers together, encouraging telecoms providers to install broadband in previously ignored areas.
3. Making Tax Digital
Making Tax Digital is the government’s initiative to transform the tax system and move to an entirely digital system for tax returns. The aim is to move to the digital system for individuals and business owners by 2020. The system is expected to start being implemented in April 2018, and Phillip Hammond could use this Budget to announce more about it, such as the exact timetable for its implementation, or what earnings threshold will be exempted from having to make returns under the scheme.
4. Self-employed tax
The number of self-employed people has risen in the last few years, as more and more people decide to take the plunge and start working for themselves. However, some believe that this growth in self-employment has also led to a discrepancy between workers who pay tax using PAYE, and the self-employed. To fix this discrepancy, the Chancellor may announce measures to change the tax system by raising National Insurance payments for the self-employed from nine per cent to 12 per cent.
5. Corporation tax
The Chancellor has discussed how it will be necessary to ensure that the UK is still a good place to invest once it has left the European Union. One way which he may attempt to do this is by cutting corporation tax. The rate currently stands at 20% and is scheduled to fall to 19% this year, then 17% by 2020. Phillip Hammond may use this week’s Budget to announce even further cuts.