The Autumn Budget of 2018 has proved quite a beneficial one, particularly for the small business. Let’s take a look at some of the key points from this year’s Chancellor’s speech.
Employment set to keep growing
With employment at a near record high, the Office for Budget Responsibility has forecast that it will keep growing. 3.3 million more people are in work since 2010, and it is reckoned that 800,000 more jobs will be available by 2022.
National Living Wage to increase
From April 2019, the National Living Wage will rise from £7.83 per hour to £8.21 per hour, effectively benefiting in the region of 2.4 million workers, with a rise of £690 per year for those working full time.
Tax-free Personal Allowance to rise
The tax-free Personal Allowance, the amount you earn before you start paying tax, will rise by £650 in April 2019 to £12,500. This is something that has been introduced earlier than planned, and it will be maintained in 2020.
Higher Rate Threshold to increase
The amount higher earners can net before they pay tax at 40 per cent is set to increase from £46,350 to £50,000 in April 2019. So, in 2019-2020, there will be almost one million fewer higher rate taxpayers than in 2015-2016.
Universal Credit work allowances increased
£1.7 billion will be invested into increasing existing work allowances in Universal Credit. This will see working parents and those with disabilities claiming Universal Credit £630 per year better off. There will also be additional help for people moving from existing benefits to Universal Credit as well as targeted support for those repaying debts.
Travel benefits on the horizon
2019 will see fuel duty remaining frozen for the ninth year in a row, whilst short haul Air Passenger Duty will also stay the same for the eighth year running. Long haul rates are set to rise in line with inflation.
£30 billion will be invested to improve roads. A £28.8 billion National Roads Fund incorporates £25.3 billion for the Strategic Road Network to improve motorways, trunk roads and A-roads. It will also assist with the funding of the new network of local roads, to be called the Major Road Network, as well as larger local road projects. There will also be a fund of £420 million for local authorities to repair potholes and to repair tunnels and bridges, as well as £150 million to improve local traffic hotspots like roundabouts.
Retail businesses will enjoy a £1.5 billion boost with business rates for smaller high street outlets seeing their rates bills slashed by a third for two years starting from April 2019. There will also be a £675 million investment into the improvement of transport links; the redevelopment of vacant shops into homes and offices, and the restoration of historic properties.
Extra protection for businesses
The government will invest £1 billion more into defence over the next two years, providing the Ministry of Defence with more funds to help protect the country against cyber-attacks and other threats.
Increase in the Annual Investment Allowance
The Annual Investment Allowance will rise from £200,000 to £1 million from 1 January 2019 to 31 December 2020 with the aim of helping businesses invest and grow. In addition, from October 2018 businesses will be able to deduct 2 per cent of the cost of any new non-residential structures and buildings off their profits before tax is due.
Changes to the Apprenticeship Levy
Further changes to the Apprenticeship Levy will be introduced with a view to supporting employers. From April 2019, larger businesses may invest up to 25 per cent of their levy to support apprentices in their supply chain. For some employers there will be a cut of 50 per cent on what they currently pay for apprenticeship training, with the government to make up the shortfall. Further details will be released in early 2019.
Should you have any questions about how the latest Autumn Budget will affect your individual business, your local bookkeepers will make an excellent first port of call.