Autumn Statement: Business Owners

 

£23 Billion Investment (NPIF)

£23 billion is being invested into the economy, with the aim to increase productivity. Some examples of this investment area include:

  • Transport
  • Digital communication
  • Housing
  • Research & Development

There are also some schemes that will receive additional funding:

  • Development of driverless cars
  • Renewable fuel technologies
  • Investment in transport infrastructure
  • Trail of 5G networks, and full fibre broadband initiatives
  • Increase in Research & Development support

Businesses In Rural Areas Have Rate Relief Doubled

Businesses in rural areas will benefit from their rate relief being doubled, from 50% to the full 100%.

The changes will take place in April 2017 and the criteria for this relief includes:

  • Village must have a population of under 3,000
  • Business is a village shop or post office, with a rateable value of less than £8,500
  • Business is a public house or petrol station with a rateable value up to £12,500

100% Tax Allowance For Provision Of Electric Vehicle Charging Points

A new capital allowance will provide a 100% first-year allowance for expenditure incurred on electric car charge point equipment on or after 23rd November 2016.

It will expire on 31st March 2019 for corporation tax and 5th April 2019 for income tax purposes.


National Living Wage & Minimum Wage Increasing

From April 2017 – the National Living Wage will increase to £7.50 per hour, increased from £7.20 from April 2017 – representing a wage increase of just over 4%.

National minimum wage will also increase on this date. Here are the changes:

  • 21-24 year olds: £6.95 – will become, £7.05 per hour.
  • 18 – 20 year olds: £5.55 – will become, £5.60 per hour.
  • 16 – 17 year olds: £3.40 – will become £3.50 per hour.
  • Apprentices: £3.40 – will become £3.50 per hour.

The government will spend £4.3million to make sure that employers are actually paying the National Minimum Wage to their employees.


VAT Flate Rate Scheme

HMRC are changing their definition of a ‘limited cost trader’ and will be introducing an additional test to decide a trader’s flat rate percentage.

Traders that meet the new definition will have to use a fixed rate of 16.5%.

If your business doesn’t purchase any goods, or on the other hand, purchase lots of goods – then the result of the test will be self evident.

Other businesses will need to complete a simple test to work out whether they should use the new 16.5% rate.


Employer Shareholder Schemes Withdrawn

As of December 2016, the government will remove income tax reliefs on the receipt of buy-back of shares issued to an employee under an employee shareholder agreement.

They will also remove CGT exemption relating to shares received as consideration for entering into an employee shareholder agreement on or after the same date.

Any shares made before that date are not affected. Corporation Tax reliefs for employer companies are not affected.


CORPORATION TAX REDUCED TO 17% BY 2020

As previously announced, business owners will save 3% on corporation tax by 2020.


NATIONAL INSURANCE THRESHOLDS

From April 2017, the National Insurance threshold for both employees and employers will be set at £157 a week.

There will be no cost for employees, but the maximum cost to businesses will be an annual £7.18 per employee.