Wednesday, December 13, 2017
What does the Autumn Budget mean for businesses?
We take a closer look at what the announcements made as part of the Autumn Budget mean for our key sectors.
Diesel cars, tax changes and a rising Living Wage were all highlights of Chancellor Philip Hammond’s second Budget on November 22. We take a closer look at what was covered in the hour-long speech and how the measures announced will affect our key sectors.
One of the most significant changes revealed as part of the November Budget is that landlords who have set up as limited companies will face an increase in taxes when they sell their properties when the indexation allowance, a tax relief allowing gains to be reduced depending on the duration of property ownership, is frozen in January 2018. With landlords’ incomes potentially going to be squeezed further, it’s a good time to make sure they have adequate insurance in place to prevent them being hit by surprise repair and replacement costs.
There was also a mixed reaction to the government’s promise to look into the barriers preventing landlords offering longer, more secure tenancies. While some parties think tenancies over 12 months would be beneficial to both landlords and renters, others have expressed concerns that they won’t be able to raise rents and that they may be stuck with difficult tenants for longer periods.
Fleet owners and motor traders
Transport issues are usually front and centre of the Budget and this autumn was no exception. Sales of all new diesel cars which don’t meet the Real Driving Emissions Step 2 Standards will face a one-off tax increase for the first year of ownership from April 2018. The tax will only apply to cars – not vans and trucks – and is expected to have an impact until 2021, when all new cars should meet the standards.
It was also revealed that different rates of Vehicle Excise Duty will be levied depending on a car’s CO2 emissions band. Increases can vary from £20 to £400 plus.
There was also a real focus on the move towards electric vehicles, with £100 million in subsidies to help persuade consumers to buy electric cars.
There was some good news for those working in the construction industry as Philip Hammond made house building a ‘number one priority’ in his Budget. He pledged that construction numbers will be up to 300,000 a year by the mid-2020s and announced a stimulus package of £15.3 billion of cash for new housing over the next five years. This brings total support for housing to around £44 billion.
A chunk of this cash – around £204 million – will be put towards innovation and skills in the construction sector.
There were also several changes which will have been welcomed by small companies, including bringing the planned switch from increasing rates in line with RPI inflation to the lower CPI measure forward by two years, which could save businesses as much as £2.3 billion.
Businesses will, however, have to absorb the increase to the National Living Wage which will come into force in April.
Alongside small businesses, retailers have widely welcomed changes to the way business rates will be calculated in the future, with high street stores long arguing that the current rates system puts them at a disadvantage compared with online competitors.
Measures to help people take their first step on the housing ladder, including scrapping Stamp Duty on first-time buyer homes worth up to £300,000, are also likely to have a positive impact on DIY and homeware retailers, who have been hit by the slowing housing market.
Protecting your business
Whatever upcoming changes are likely to impact businesses, having the right insurance in place can help owners prepare for the unexpected and prevent disruption..