The Chancellor’s Budget yesterday included measures in several areas of tax, expenditure and public policy that are specifically targeted at helping the UK’s small business community.
The package included:
- £900 million of business rates support for small businesses on the high street
- A freeze of the current VAT threshold for two years
- The protection of the Employment Allowance which will now be focused on small employers to knock £3,000 off their National Insurance Bill
- A new pilot scheme to fund training for the self-employed that FSB will be taking part in
This is the most small-business-friendly budget that this Chancellor has delivered. He has listened to our requests across many areas of tax and public policy, putting him firmly on the side of Britain’s small businesses.
On the tax front, small firms up and down the country will be pleased to see the VAT threshold frozen for two years. FSB was credited in the speech for our campaign on this, stopping an over-reach which would have created a mountain of bureaucracy and a tax-hike for more than a million businesses. I look forward to seeing further innovative changes to VAT post-Brexit.
Small businesses on our high streets that cannot get Small Business Rate Relief will be delighted with the significant discount for the next two years, which on average will help these businesses to the tune of almost £2,000 each, but potentially up to around £16,000 off small businesses facing the biggest bills.
The decision to protect and refocus the Employment Allowance means that small firms will use the £3,000 of help to increase staff hours, improve pay and meet the rising costs of the National Living Wage, boosting jobs and productivity.
“Through the Budget, the Chancellor is now using the strength of the Treasury to back small business. We have already seen a significant change of tone in recent months towards helping businesses, right from the top of government, and yesterday represents the change of policy that backs this up. This is long due recognition that small firms are the UK’s job creators and community leaders. The productivity challenge for this country will only be resolved by backing small business, and today marks an important step to achieve this.
Other measures yesterday included the extension of important small business creation schemes like the New Enterprise Allowance and Start-up Loans, new money to tackle potholes on local roads, and previously-announced decisions to freeze fuel duty for a ninth consecutive year and to loosen restrictions on large firms sharing their apprentice levy money with their supply chains.
One area for caution, however, is the proposed extension of IR35 from the public to the private sector.
This must be handled with extreme care, so that lessons are learned and impact assessed from the public sector rollout. This massive expansion of such a difficult and controversial tax regime must not be rushed.