The Chancellor’s final Budget before Brexit was reactive and non-reformist but did include a clutch of welcome commitments to back UK entrepreneurs, according to experts at Smith & Williamson, the accountancy, investment management and tax group.
Announcing yesterday (29 October) that “entrepreneurs must be at the heart of a dynamic economy,” the Chancellor outlined plans to resist calls to scrap entrepreneurs’ relief (albeit with changes to the qualifying period), raising the annual investment allowance to £1 million and cutting the business rates bill by a third over two years where the rateable value is £51k or less.
Ami Jack, national tax director at Smith & Williamson, commented: “This was the Budget that everyone expected amid the current uncertainties in the UK and Europe - reactive, non-reformist and, at least in part, a crowd-pleaser. Nevertheless, the Chancellor did make a series of notable announcements that, taken together, provide a welcome boost for entrepreneurs.
“Some observers worried he would scrap entrepreneurs’ relief, which would have been an unwanted kick in the teeth for business owners at the heart of the UK economy. The Chancellor’s extension of the qualifying period for entrepreneurs’ relief from 12 months to two years is unlikely to affect many entrepreneurs.
“Businesses owners needed the confidence that this government is on their side, so raising the annual investment allowance and cutting business rates bill are positive moves. The Chancellor’s heavily-trailed new digital services tax will be felt by global corporations with revenues of more than £500m, although scale-ups will take comfort from the fact that it won’t apply to them. In spite of today’s announcement, it’s worth considering that whatever was promised in this Budget could be forgotten quickly if the Chancellor is forced to hold another fiscal event in Spring.”
Other key announcements from the Budget included:
Personal allowance to rise to £12.5k and higher rate threshold to rise to £50k from April 2019;
Apprenticeship support for smaller firms - contributions to halve from 10% to 5%;
Green agenda - tax announced on manufacture and import of plastic that includes less than 30% recycled material;
Stamp duty relief for first-time buyers extended to shared owners where property is £500k or less;
IR35 changes to private sector organisations delayed until April 2020 and will apply only to large or medium firms;
Relief for acquiring IP-rich businesses announced.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of publication.