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'A 'business as usual' budget offers little surprise for UK business owners

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by Startacus Admin

UK Budget 2017William Buist is a speaker, author and mentor to owner-led businesses. After watching the 2017 UK Budget William had this to say about what the 2017 Budget had in store for the UK's small business and startup community.

Key elements of the budget:

Every year the country has a budget, a review of the financial position of the country, and sets out the plan of how it will raise, and spend or invest the money it needs. There are lots of lessons for business in the process, as well as the outcome. Parliament makes it a bit of a “show” but the underlying  planning work has both depth and substance. Businesses should do the same. 

Specific measures that affect small businesses:

The Chancellor, Mr Hammond, promised a “little bit” of help to small business. The most important element was around investment, and particularly long term (so called “patient”) investment with a new fund for innovative businesses from investors that are prepared to wait for long enough for the William Buistbusiness to both develop and then scale into global markets. Along with doubling the limits in the Enterprise Investor Scheme (EIS) - and protections to ensure it is not used for tax avoidance - there is likely to be more funds available on favourable terms for investment in technical and digitally innovative businesses in the coming years. If your business is a technical one, or has strong digital or innovative elements you should investigate if these schemes make sense for you.
 
Some changes to the electric vehicle charging infrastructure were announced with an investment of £400M - For businesses with a fleet of vehicles and working locally within a city it is time to start thinking about replacing your fleet in the coming years. One minor change is that if a business offers charging facilities at work these will no longer be considered a benefit in kind.  
 
On apprenticeships there was more money made available for further education colleges and if you are seeking new talent starting with an apprentice may be worth exploring. There will be an increase in National Living Wage by more than 4% and the Personal Allowance will increase to £11,800 and higher rate to £46,450, In addition capital relief for investment in businesses will be aligned to capital gains tax allowances. The taxation treatment of small businesses now means its much less beneficial as a vehicle to minimising personal taxation. Strategically I think this is a sensible shift meaning that running a business is an activity that is undertaken to create value rather than to manipulate personal costs.
 
There was a suggestion before the budget of a reduction in the threshold for VAT registration, but this did not happen. In its place a consultation was announced to look at whether the threshold causes a disincentive to growth and, if so, then what changes would minimise that. One minor change was that digital platforms would be jointly responsible for ensuring that VAT collected is properly accounted for to HMRC. For businesses that use these platforms (Amazon, eBay, Etsy etc) there may be changes in the way that tax is processed that may mean a change to your internal process.
 
For most businesses the changes to business rates will be welcome, with indexation limited to the consumer price index (rather than the retail price index) from January. In general this will mean annual business rate increases will be smaller. Also announced was a change to a business rate revaluation cycle from five years to every three. Whilst this will mean that for most businesses large shifts in business rates may be less likely, these are still a large part of the cost base of some businesses. Time will tell if the collection of changes is on balance more predictable and secure, which from a risk management point of view, is the most important.
 
Summary...

For most start ups and small businesses this budget will have limited impact. To sum it up in three words - “business as usual”.

William Buist
William Buist is a speaker, author and mentor to owner-led businesses. He focusses on strategic implementation from the design of the business model and structure to long term transformational business change. His clients are selected because of their collaborative mindset, determination to make a meaningful difference, and their self determination. William’s experience in risk management means he is skilled in analysing the impact of change, especially when it is imposed by external matters such as the annual budget statement. Visit williambuist.com


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Published on: 22nd November 2017

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