Bashing Business Budget?

The Chancellor, Philip Hammond, may have expected some plaudits for his increases in social care spending and higher funding across a number of areas health, education and infrastructure. Sadly for him the big headlines have made by his supposed attack on “white man van” – the self-employed.

Budget highlights for Dudley Borough small businesses from Lewis Smith & Co.

Here’s our pick of the highlights of the Chancellor’s first budget (and the last one to be delivered in Spring).

National Insurance
The announcement that set Fleet Street ranting was an increase in Class 4 National Insurance for the self-employed. The rate will go up from 9% to 10% in April 2018, and then form 10% to 11% in April 2019.

The increased NI rate applies to earnings between £8,060 and £43,000. Class 4 earnings over £43,000 will continue to be taxed at 2%.

Commentators have said that this means the self-employed could pay, on average, around £240 per year more in NI.

Dividend Tax
In an attack on both small business directors and on wealthier savers the tax-free dividend allowance will fall from £5,000 to £2,000 per year from April 2018.

Income Tax
The personal allowance will rise by £500 to £11,500 and the higher rate threshold increases to £45,000 from April 2017.

ISAs
The annual ISA allowance increases to £20,000 from April 2017

Business Rates
£435 million of support has been set-aside to mitigate the affects of interest rate rises. Pubs have been singled out for help with a £1,000 discount on rates for one year (if they have a rateable value less than £100,000.

Local authorities are being given £300m to provide discretionary relief.

Tax Avoidance
Measures have been put in place to stamp down on tax avoidance. These include:

Greater regulation of pension transfers to foreign schemes
Imposition of VAT on mobile phone use by UK residents when outside of the EU
Penalties on professionals who sell tax avoidance schemes that are later found to be unlawful.

Unsure What This Means for You?
There are a number of Budget changes that will impact our small business clients. If you aren’t sure how this will affect you and your business in the months and years ahead then Lewis Smith & Co. can help.

Simply call 01384 235549 or email info@lewissmith.com to set-up a free, no-obligation discussion about your tax situation.

Lewis Smith & Co. – Local accountants for Sandwell businesses.
Picture of Philip Hammond from Flickr courtesy of the US Government