‘Spreadsheet Phil’ Hammond took to the dispatch box today to deliver his first spring budget (and probably his last ever – from now on they will be delivered in the autumn). Here’s a round-up of the key announcements that will affect businesses.
1. A tax raid on the self-employed
The government is frustrated that the growing proportion of people working for themselves is taking its toll on the exchequer. To that end it will increase the rate of Class 4 national insurance contributions paid by the self-employed from 9% to 10% next year and 11% in 2019. And the tax-free dividend allowance, which allows those who are paid via their own limited company to avoid tax, will be cut from £5,000 to £2,000 from next April.
2. Respite on digital taxes for small firms
The incoming changes to the way businesses pay their taxes, the so-called Making Tax Digital scheme, have proved controversial as many fear they will create a fistful of new red tape for small firms to deal with. The government is pressing on with the scheme but the smallest companies (those with a turnover below the VAT threshold) will have now have until 2019 (an extra year) to comply.