Five Autumn Statement forecasts for small businesses
The annual Autumn Statement, which combines with the Budget address in March, provides a reference point for the British business community to see what is in store when it comes to future policy.
As well as looking back on how other legislation has performed, it also provides a platform for the government to reveal how Britain is doing economically – with statistics provided by the Office for Budget Responsibility.
With chancellor Philip Hammond set to give his first speech from the despatch box after making his way over to the Houses of Parliament with that famous red ministerial box, Business Advice provides some insight by way of an Autumn Statement forecasts article.
In one of the most transformative moves in recent tax history, former chancellor George Osborne announced in the 2015 Autumn Statement that small firms would have digital tax accounts.
As part of a £1.3bn reform of HMRC, the aim was to have most businesses, self-employed individuals and landlords manage tax affairs online by 2020 – through quarterly filings and an end of year statement.
However, our Autumn Statement forecasts suggest Hammond could provide an update to the digital tax plans, indicating requirements for small businesses to handle tax affairs through accounting software could be pushed back.
In an acknowledgement that the new legislation will mean new costs and accountability for Britain’s smallest firms, the policy will not be reversed but slowed down.
Rather than reduce VAT, Hammond could continue with Osborne’s crusade to increase the personal income tax threshold from £11,000 to £12,500.
At a time when an increase to the National Living Wage has put pressure on the nation’s small business hirers, an increase to the personal income tax threshold could provide some welcome relief.
We could also see an increase to the threshold for middle earners that had been pulled into the higher rate tax threshold.
One of the biggest worries when the British public narrowly voted to leave the European Union in 23 June was that centralised funding from the economic community would be withdrawn.
Farmers, scientists and engineers are just some of the sectors that rely on funding from the European Union, but Autumn Statement forecasts suggest they might be fine.
In a bit of good news, Hammond may reveal that projects signed for before the Autumn Statement would continue top be fully funded – even after an eventual issuing of Article 50 and Brexit.
It’s a source of frustration for many small businesses – the rate at which energy costs are levied and the difficulty in switching.
These energy firms, alongside telcos, could soon be in a position where each are legally mandated to make the switching process far easier.
Furthermore, additional Autumn Statement forecasts suggest there could even be a cap on energy bills to provide smaller firms with more financial oxygen to breath.
One thing that we know for sure is that Hammond will provide detail on a wide-reaching infrastructure development plan, improving the UK’s road network and updating rail.
However, there could also be a new committed to make sure a proportion of new contracts are ring-fenced for smaller suppliers, as part of the parliament’s drive to have £1 in every £3 of government spending being with small businesses.
Accessibility, assistance and compliancy issues will be raised, all in the hope that small businesses will find it easier to tender and then serve public sector contracts.
Business Advice will be providing comprehensive coverage of the Autumn Statement on Wednesday 23 November, covering all of the most important developments for small business owners and managers.
If you want to know what happened in the March Budget, check out our useful summary piece here.