A summary of the Autumn Statement 2016 for business owners.
£1bn broadband investment
Small businesses struggling with poor internet connections could soon be able to access a better connection after the chancellor announced, in the Autumn Statement 2016, an investment of more than £1bn into building out the UK’s digital infrastructure.
The Chancellor said the government would be pursuing improvements in speed, security and reliability. Additionally, 100 per cent business rate relief will be provided for the next five years when it comes to new fibre infrastructure.
National Living Wage increase
Employers with staff on the lowest legal wage will now have to pay more after The Chancellor revealed in the Autumn Statement 2016 that the National Living Wage, the replacement to the National Minimum Wage, will go up from £7.20 to £7.50 in April 2017.
Labour are planning for it to be £10 if the party comes back into power.
The tax-free personal allowance has also been increased, and will be £12,500 by the end of the current parliament.
Increase to Export Finance funds
Small businesses looking to engage with export activities will soon have access to better financial assistance. UK Export Finance, an organisation that aims to ensure that no viable UK export fails for lack of finance or insurance, is set to double in capacity.
The government is stopping what it called “inappropriate use” of the VAT flat rate scheme put in place to help small companies. The VAT flat rate scheme is an alternative way for small businesses to work out how much VAT to pay to HMRC each quarter.
Temp recruitment agencies have recently been accused of exploiting VAT rules that were originally designed to benefit very small businesses.
The government used the Autumn Statement 2016 to introduce a new 16.5 per cent rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses. This, they hope, will maintain the accounting simplification for the small businesses that use the scheme as intended.
The government will be banning letting fees for private tenants “as soon as possible” after they have risen considerably despite attempts at regulation attempts. This could hit private buy-to-let investors who may find that they have to pick up this cost.
The chancellor announced in his Autumn Statement 2016 speech that the doubling of rural business rate relief – completely removing the burden of business rates – would bring a “well-needed” tax break to small businesses that are the “lifeblood of their communities”.
Increasing rural business rate relief to 100 per cent is expected to save qualifying businesses up to £2,900 every year in business rate payments.
If you’ve got any queries regarding the planned changes, please contact us.