What the Autumn Statement means for the Business Community

01/12/2017Chancellor George Osborne delivered the combined Autumn
Statement and Spending Review to the House of Commons on 25^th
November 2017, which included a series of measures that will impact local businesses.
While the new Apprenticeship Levy that comes into force in 2017 has been
criticised by business lobby groups as an additional ‘payroll tax,’ in general
the news was positive, with the extension of the doubling of the small Business
Rate Relief, and the expansion of Enterprise Zones, encouraging developments
for many within the Business Community.

1. Business Rates

The Chancellor announced that the Government will extend the
doubling of small business rate relief in England for another 12 months, up to
April 2017, with a review of current business rates to be announced at the 2018
budget.

The extension is good news for small businesses who will
continue to benefit from either 100 per cent relief from business rates or from
tapering relief, however, pushing back the promised response to the structural
review of business rates until the 2018 budget means that larger firms continue
to be subjected to a system that is complex and expensive. The fact that the
current system is in need of reform to bring it in line with today’s economic
conditions and create a simpler and fairer system, has meant the delay has
prompted criticism from the business community and business rate experts.

2. Enterprise Zones

The Chancellor announced the expansion of the Enterprise
Zone programme in England with 18 new sites planned across the country –
including one planned for Great Anglia – and the extension of eight sites on
the current programme. Enterprise Zones
were created in April 2012 and are areas where companies can benefit from
business rate relief and funding assistance. They are viewed as a critical part
of the Governments Plan for Growth and their expansion is good news for local
businesses that stand to benefit from tax breaks, lower levels of
planning control and the potential to use enhanced capital allowances.

3. Making Tax Digital

The Chancellor revealed how the Government intended to
digitalise tax and tax returns for small businesses and the self-employed,
stating that it will invest £1.3bn to transform HMRC into ‘one of the most
digitally advance tax administrations in the world.’ The plan is that small
businesses will have access to digital tax accounts by 2017 and that most
businesses and self-employed individuals will have to record their tax affairs
digitally by 2020.

While tech savvy businesses will welcome the transition to
digital, in order to facilitate a smooth transition across the board, the
government will need to fulfil their promise of providing support to those that
need help adjusting to digital technology.

4. Apprenticeship
Levy

As previously announced, the government will be introducing
an Apprenticeship Levy, with the aim of raising the skills of the nation. In
his statement the Chancellor set out the impact of this on businesses.  The levy which comes in effect on April 2017
will be set at 0.5% of an employer’s wage bill and be paid through PAYE. Each
employer will receive an allowance of £15,000 to offset against their levy
payment which means the levy will only be paid on any wage bill in excess of
£3m.

While this also means the levy will only affect around 2 per
cent of UK businesses, it has come under criticism from business lobby groups
as ‘looking like an additional payroll tax.’

5. Entrepreneurs Relief

There had been some speculation that Entrepreneurs Relief
was due to be scrapped so its survival will come as good news to the business
community. The scheme is open to directors and business owners who own 5 per
cent or more of a company and allows them to enjoy a 10 per cent tax rate on
capital gains up to a lifetime allowance of up to £10m, compared to a 28 per
cent rate of tax payable without the relief.

6. Start-up Loans

The government also demonstrated their commitment to helping
to fund more Start-up’s across the country with the announcement that it is set
to hit its target of facilitating 75,000 Start up Loans by 2020. Again, this is
good news for local entrepreneurs who require initial capital to get a new
business off the ground.

If
you require any business or tax advice in light of the recent Autumn Statement,
please contact Gary White at gary.white@cbhc.uk.com