Paul Caunter reviews the 2018 Spring Statement and explores the measures most likely to affect SMEs:
Philip Hammond was clearly full of the joys of Spring this week when he delivered his statement along with bouncy Tigger analogies. Although not a full annual budget now that these take place in the Autumn, the statement provided some useful insight into the government’s fiscal plans, and plenty to interest SMEs.
- Late payments
Acknowledging that the late payment of invoices can cause considerable financial difficulties for small businesses, the chancellor confirmed he would be looking to introduce measures to help eliminate late payments.
- Entrepreneur tax
A consultation has begun exploring possible changes to VAT for small businesses following insight that the current £85,000 VAT registration threshold may be disincentivising entrepreneurs from growing their businesses. Possible measures include a gradual introduction of 20% VAT above £85,000.
- Business rates
The next business rates revaluation, originally scheduled for 2022 has been brought forward to 2021, meaning that businesses can benefit from the planned three-yearly rate changes sooner.
Mr Hammond acknowledged that the new system to boost apprenticeships had presented challenges to small businesses, and announced plans to release £80m of funding support to help small businesses recruit apprentices.
- Making Tax Digital
HMRC is phasing in its Making Tax Digital (MTD) regime, which will require taxpayers to move to a fully digital tax system from 1 April 2019. All VAT registered businesses will be required to keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software.
- Clean vans
Mr Hammond raised a proposal which could see rates of Vehicle Excise Duty (VED) lowered for low-emissions commercial vehicles, hoping to encourage a shift away from diesel in this sector.
For further information on any of these points, don’t hesitate to contact the Ignition team on 01872 272900