Overview of the Autumn Budget 2018

Delivering the Autumn Budget 2018 speech, Chancellor Philip Hammond won over small and medium-sized enterprises…...
"

Start reading

Delivering the Autumn Budget 2018 speech, Chancellor Philip Hammond won over small and medium-sized enterprises (SMEs) by introducing measures to support them and by levelling the playing field.

Benefits for SMEs

SMEs will benefit from the business rates cut, £675 million to improve high streets, increase in the annual investment allowance to £1 million, and progress in the taxation of large technology companies.

The Chancellor also announced that the apprenticeship training costs incurred by small companies will reduce from 10% to 5%. Many SMEs welcomed the move as the cost of training apprentices will reduce, encouraging them to hire and train more staff. They believe that the money saved on apprentice training can be used for extra benefits to the trainees, to help retention.

Other points from the budget

From April 2019, individual taxpayers can take advantage of the increased personal allowance, which will stand at £12,500, along with a higher threshold of £50,000. The self-employed will still have to pay Class 2 NIC.

Businesses will also benefit from the increase in the annual investment allowance, now raised to £1 million. The annual investment allowance can be used for upfront tax deduction from the business’ capital expenses on purchasing or upgrading machinery and plant. The measures are expected to encourage business investment in the short-term.

The business rate for retail properties, standing at £51,000, has been reduced, with the reduction applicable until the next business rate evaluation, in 2021.

The Autumn Budget 2018 saw the introduction of 2% capital allowance for non-residential buildings entering into contracts from 29 October 2018. It fulfils the demand from many businesses, as they believe it will spur investments into infrastructure.

Contractors working for the public sector through personal services companies were also affected by the budget. Now, the customer is responsible for deciding whether the contractor falls within the purview of IR35, requiring the customer to operate the NIC and PAYE. This regulation takes effect from 2020, giving businesses enough time to put necessary measures in place.

The bottom line

The Brexit negotiation is still a worrying factor as the UK government has not been able to thrash out a lucrative deal for the nation. This could affect procurement. So, the Autumn Budget 2018 is a short one and it is expected that the spring budget will be more comprehensive. The short-term respite that SMEs and businesses have earned will encourage consumer and business spending while the government works out a profitable Brexit deal.

Steve Trainor

Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.

More from this category

More from this category

Zycus Horizon Event 2021

We are pleased to let you know that we are back with Zycus’ annual flagship event, Horizon 2021 which is scheduled to be held on February 17-18, 2021 and it would be an absolute honour for us to have you as one of our esteemed guests.  As an industry pioneer in AI...

read more

Post-Brexit public sector procurement

We officially left the EU on the 31 January 2020. The current EU public procurement rules have continued in force in the UK during an 11 month transition period, Under the terms of the EU-UK Withdrawal Agreement. The transition period is close to expiring. The UK may...

read more
Share This