Budget 2018 – The Business Bits
Today saw the Budget announced. It can be a fairly dull affair, so we’re bring it to you in manageable chunks! Here’s The Budget 2018 – the Business Bits!
So that we do make this a manageable read, we’re just bringing you the highlights, and we’re aiming to keep it snappy. If you’d like more detailed info please get in touch! Please also have a read of our blog: Budget 2018 – It’s Personal! for personal tax changes.
Business Rates Relief
Business rates will be cut by 1/3 for small retailers for 2 years, for businesses with a rateable value (rent) of £51k or less.
If you’re rateable value is £51k, this could mean as much as £8k saved in business rates!
Weird announcement alert:
There will be business rates relief for public lavatories!
High Street Retail Boost
There will be a £675 mllion “Future High Streets” fund, in recognition of the decline of high street retail. The fund can be used to regenerate our high streets, including change of use to residential for some retail premises.
Annual Investment Allowance Increase
This is currently £200k, but will increase to £1 million in April. What does it mean? You can currently spend up to £200k on allowable business assets (think equipment, vans, kitting out your shop premises) and all of this comes off your profit before we work out your tax.
£200k already sounds a lot, and in some cases means everything you spend is allowable. However, for businesses growing fast, the increase is a major advantage.
If you have profits of £30k, and buy a van for £20k, this will reduce your taxable profits to £10k. If you’re a limited company this will reduce your corporation tax by £3,800. If you’re a sole trader it’ll reduce your tax and NIC by £5,800! Tidy!
VAT Threshold Stays the Same
For the 2nd year running the VAT threshold hasn’t increased, so it’s still £85k. This means that if your sales for any 12 month period are over £85k, you need to register for VAT within 30 days.
If you go over £85k in one month, say October, you’ve got til 30 November to register, then you must start charging VAT from 1 December (and start claiming VAT).
National Living Wage and Minimum Wage Increase
Make sure you’re paying your employees the right amounts:
National Living Wage increases from £7.83 to £8.21 from April 2019 for over 25s
National Minumum Wage increases from £7.34 to £7.70 per hour for 21s to 24s
Apprentice Rate increases from £3.70 to £3.90
This is an important one if you’re business is in hospitality:
Beer, cider and spirits duty frozen again
RPI increases on wine duty will continue
White ciders will be taxed at a higher rate
New Digital Services Tax
This has been introduced to tax big business, like Amazon and Google, and will apply to businesses with sales over £500k. More detail to be announced.
This budget was delivered with many references to “the end of austerity”. It’s a welcome budget for help with business rates, and support for our high street, that is suffering badly.
If you’d like more detail on any of the above points, please get in touch!
Thank you for reading!
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