The year-on-year decrease in corporation tax for businesses, was met with a radical cut in the tax-free dividend allowance for self-employed workers and there’s been a piecemeal gesture towards business rate rises for smaller firms. All of this against the backdrop of economic green shoots, with employment at record levels, economic growth forecast up and borrowing falling.
Chancellor Philip Hammond has moderately given with one hand and moderately taken with the other in working towards creating, as he terms it, a “stronger, fairer and global economy”. This ambition might well be the order of the day. But with Article 50 on the horizon - which could bring potential economic uncertainty - is this a missed opportunity to provide a boost to business as we head into unchartered territory?
The key talking point for SMEs ahead of the Budget was the concern about the impact of the business rates revaluation. Ahead of that revaluation review, the chancellor announced three measures. The first, to any business coming out of small business rate relief will benefit from an additional cap. The second is a £1,000 discount in business rate bills in 2017 for all pubs with a rateable value of less than £100,000. Finally, local authorities will have access to a £300m fund to deliver “discretionary relief” to specific cases. So, overall, providing a £435m package to business.
We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. £435m is a drop in the ocean compared with the £25bn a year that the tax raises.
Furthermore, measures will be put in place to prevent companies from converting capital losses into trading losses generating £820m for Treasury coffers. Further action is being taken through introducing UK VAT on roaming telecoms services outside the EU in line with international standard practice.
The chancellor announced a £270m fund (between 2017-18) for disruptive technologies with the power to “transform the UK economy”. Included in this are technologies such as biotech, robotic systems and driverless cars. It will be supported by the Industrial Strategy Challenge Fund (ISCF).
As we head into uncertain period, let’s hope for calmer waters as businesses find their feet and navigate a new world.
Anil Stocker, co-founder and CEO of MarketInvoice