We realise that it’s not that interesting a topic, so you may well have missed something about the recent budget. We recently attended an informative talk on the subject by local expert: Brian Stopford of Stopford Associates at the last 2020 breakfast meeting. So we’re passing on some key nuggets of information and adding a few more of our own. We hope you find the following information useful. And remember to get specialist advice for anything you’re not sure on.
The overriding comment about this budget was that “austerity ends but discipline remains”. That said, the government plans to spend an additional £100bn to 2023/4, which certainly marks a clear change of direction. A few key facts and figures follow:
- Personal allowance increased from £11,850 to £12,500
- Base rate band increased from £34,500 to £37,500
- Annual investment allowance has increased from £200K to £1m for 2 years (commencing 1.1.2019)
- Structures and buildings allowance is set at 2% – write-off for new commercial buildings
- VAT threshold has been frozen for 2 years – at £85K
- Entrepreneurs’ relief remains with no considerable changes
- IR35 rules will now also apply to large and medium organisations
- Business rates reductions are available for small retailers. Up to 1/3 reduction for retail premises with a rateable value of below £51K from April 2019
- Making tax digital – Businesses must submit their VAT returns via the new HMRC platform from April
The High Street in focus
The chancellor cut business rates bills by a third for almost half a million small high street shops in a £1.5bn spending pledge to fight the threat posed by online retailers. This £900m of immediate business rates relief for small retailers is part of an effort to combat high street vacancies. Both high rates and the rapid rise of online shopping have significantly threatened small businesses.
To put this into perspective, a few examples have been suggested. For example, a pub with an estimated rental value of £37,750 would save an estimated £6,178 on business rates next year. While a newsagent would save around £1,749 with a rental rate of £14,250. Further detail on various business rates reliefs is available on the GOV.UK website.
While the chancellor hopes this move will give some short-term relief for struggling retailers, the budget also included a £675m transformation fund for local high streets to help them transform longer-term. Such projects could include supporting infrastructure and transport access. This fund is known as the Future High Streets Fund and again, further information on this is available on the GOV.UK website.
While these are the highlights from the recent budget, of course, this budget and the ability to afford it is subject to the economy’s future performance. As ever, there are currently a number of economic and political pressures in play. And these may well affect the economy’s performance. And therefore all these plans could be subject to significant change. Of course, Brexit is pivotal here, read the latest guidance on a ‘no deal’ scenario.
This post first appeared on Invest Ashfield & Mansfield website.
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