Chancellor Philip Hammond presented his Autumn Statement to the nation, outlining the governments budget plan.
Mike Cherry, national chairman at the Federation of Small Businesses, gives his thoughts and reaction to Hammond’s statement.
Corporation Tax
‘FSB fully supports the government’s aims to enhance the UK’s reputation as an internationally competitive business tax location. The decision to further lower corporation tax is an important statement of intent and will provide a welcome boost for affected firms.
‘We hope the government and the Office of Tax Simplification now builds upon this measure for small businesses by streamlining the tax system, particularly delaying implementation of mandatory quarterly tax reporting.’
National Living Wage
The National Living Wage will rise from £7.20 an hour to £7.50 from April next year.
‘Government has listened to FSB’s concerns and has announced a more modest increase in the National Living Wage (NLW) to £7.50 per hour. The 4 per cent increase is within the range of small business expectations.
‘But small employers will need support, especially looking ahead to steeper increases to meet the 2020 target. Recent FSB research found that 47 per cent of small businesses cite labour costs as the main driver of the rising cost of doing business. For this reason, we are calling on government to increase the employment allowance from £3000 to £4000 to help small businesses increase pay and create jobs.’
Digital communications
‘The £1 billion funding announcement is an important step in the right direction to improve digital connectivity with three in four (75 per cent) small firms saying broadband is vital to their business. This investment should be targeted towards small businesses and business parks to have maximum impact.
‘This investment is a welcome and timely development, and should help lead to faster broadband speeds across the UK. Beyond this investment, it is also important that the new Universal Service Obligation includes business premises to help those in the most hard to reach areas. A strategy is now needed to help businesses take full advantage of the digital economy which will help improve productivity and growth.’
Insurance premium tax (IPT)
‘The Autumn Statement decision to raise IPT to 12 per cent will increase the cost of doing business for all small firms across the nations and regions of the UK. Following the rise in IPT made in Budget 2016, FSB encourages the government to provide certainty for small businesses by refraining from any future changes to IPT over the course of this Parliament.’
Business rates
‘The government’s confirmation to permanently increase business rates relief will provide crucial support for small businesses. This will take 600,000 small firms out of the rates system altogether and will mean lower bills for many thousands more.
‘FSB has campaigned on this issue for many years and we are delighted that from April 1st next year small businesses will start to benefit. We are particularly pleased to see that the government listened to our calls to give rural businesses 100 per cent relief on rates.
‘Our members in London are facing huge increases in their rates bills in the wake of the recent Autumn Statement. We still want government to look again at increasing relief thresholds in the capital as the next major reform of the business rates system.’
Further reading on Philip Hammond
