It’s ‘Business As Usual’ For Brighton’s Small Businesses After Autumn Budget

Following the release of the Autumn Budget, Plummer Parsons share the main takeaways that will effect Brighton's SMEs the most.

After the failure of the last March budget for small and micro business owners, news on the Autumn Budget has been highly anticipated by business owners in the UK’s entrepreneurial hubs, like Brighton.

Despite being one of UK’s best places for start-ups, the aftermath of Brexit placed the economy under much uncertainty and businesses are looking to the Autumn Budget to bring much needed stability.

We’ve rounded up the key factors that will have the greatest effect on Brighton’s SMEs.

Key Takeaways For Micro and Small Businesses

Without making any major changes, the Autumn Budget is generally positive for UK small businesses.

Tax Compliance

For one, the VAT threshold remains at £85,000 and will continue to do so two years from April 2018. This means 1 million micro and small businesses will not be required to comply with the nationwide rollout of Making Tax Digital unless your threshold is within £10,000 and £85,000.

The UK government also responded to calls for more funding, given that SMEs are vital in the country’s recovery post-Brexit. R&D will receive £2.3 billion, while the British Business Bank gets £2.5 billion to free up more SME funding. The Enterprise Investment Scheme will double previous investments for knowledge-intensive companies, driving more growth for scalable tech businesses.

By April 2018, tax-free personal allowance and higher rate taxpayers will increase to £11,850 and £46,350, respectively. Low-income earners and early-stage start-ups would benefit the most from this.

Business rate hikes will switch from the Retail Price Index to the lower Consumer Price Index, with revaluations taken every three years instead of five. These steps are aimed to protect SMEs from soaring rate hikes.

Moreover, the staircase tax was abolished and will be refunded—a definite win for companies that occupy more than one floor in a mixed-use building.

In terms of vehicle use, additional tax will be given to diesel vehicles that are not in compliance with the latest “clean diesel” standards. The good news is that vans are exempt from this. Fuel duties also remain frozen.

Given these tax amendments, it would be best to stay in touch with your Brighton accountants to make sure that your business stays on top of your short and long-term financial strategies.

Workforce Investment

The Autumn Budget also included investment in the workforce, both financially- and educationally.

Small business employers will need to comply with the revamped National Living Wage, increasing the previous £7.50 per hour to £7.83.

The National Minimum Wage has also been adjusted. Apprentices will now receive £3.70 an hour, 16 to 17 year olds will be at £4.20 an hour, 18 to 20 years olds at £5.90 an hour, and 21 to 24 year olds at £7.38 an hour.

On top of that, the government is investing in upskilling the workforce by providing £30 million for teaching and improving their digital skills.

Infrastructure

In terms of infrastructure, the Chancellor emphasised the need to continue funding the country’s tech revolution. £500 million will be invested in 5G and fibre broadband, £540 million for electric cars and charging ports, and £1.7 billion for improving transportation systems in city regions.

Lastly, new anti-avoidance rules were put in place to make sure offshore transactions would still be taxed. Starting 2018, the HMRC will require upfront security from employers, especially for payments going through remittance basis users or overseas beneficiaries.

On the whole, the Autumn Budget has provided SMEs with enough necessary support and relief to continue their contribution to the economy. At the end of the day, however, it falls on your hands to find the ways and the means to make sure your business survives the aftermath of Brexit.

Thanks to Nick Brown for writing this blog. Nick is a partner and Head of Charity Audits and Payroll at Plummer Parsons. As well as being a member of the Information Technology Faculty of the Institute of Chartered Accountants.

If you want to contribute to the Chamber blog, contact us on hannah@brightonchamber.co.uk