A few announcements worth noting
The budget took place on Monday and was full of optimism. Hammond was accused of taking a gamble with public finances as he went for a spend budget betting on the OBR’s (Office of Budget Responsibility) better predictions for UK growth. But with Brexit around the corner all their positive predictions could soon be down turned and where does that leave our economy? And more importantly where does that leave the small business.
Here were a few announcements worth noting.
- Some tightening of the entrepreneurs’ relief rules.
- Main residence lettings relief is restricted.
- HMRC will be given greater priority in insolvencies.
- The annual investment allowance is increased for two years and new allowances for commercial buildings.
- New rules on profit fragmentation.
- Off-payroll working rules will be extended to the larger businesses in the private sector from 2020.
- No substantive changes to inheritance tax, the VAT threshold or pensions tax relief.
- Reliefs were given to the high street as the Government look to stimulate this sector.
And to Brexit: well there is news that May has made a secret deal with the EU to keep the whole of the UK in the customs union to avoid any hard borders in Ireland. But what does this mean? The economy is stagnant; it’s a period of uncertainty and we are all waiting to see what happens next.
I believe that the next few weeks will be telling. Deal or not deal? There was really little in the budget to encourage small business; nothing about dividends or national insurance contributions. No real stimulus for the small business that is the backbone of the economy.
But, as the Chancellor did, I will save the best to last: Personal tax allowance was increased to £12,500 from April 2019 and higher payer tax to £50,000. That is what many will remember from the speech.
Watch this space – the budget may have been made but Brexit is not over!