Six Autumn Budget predictions
Due to take place on Monday (29 October) ahead of vital Brexit negotiations, the Autumn Budget is likely to have announcements that will impact small business owners.
Here are six rumoured proposals from the Chancellor to bear in mind.
1. Capital gains tax break for landlords
The Chancellor may bring in a capital gains tax break for landlords who sell properties to tenants who have been renting for at least three years.
As it stands, landlords pay up to 28% in capital gains tax when they sell their property. Under this change, profits on growth would instead be split between the landlord and the tenant.
2. Controversial VAT raid scrapped
Mr Hammond was reportedly considering a VAT raid on small businesses. VAT is currently paid on turnover of £85,000 or more, but he wanted to halve it to £43,000. This was expected to affect half a million small companies.
Thankfully, he dropped the proposal after a barrage of complaints from MPs and small business groups. Instead, he is expected to freeze the £85,000 threshold until 2022. After that, he wants to introduce a sliding scale where the more a small business earns, the more they get charged in VAT.
3. Green incentives and taxes
The government is also likely to review green incentives and taxes, looking across the supply chain to reduce waste and single-use plastic.
Those within the industry have suggested this could be in the form of taxing raw materials and taxing additives that make recycling more difficult, consumption taxes at the point of sale, introducing a deposit and return scheme and taxing incineration.
4. Increase in gas tax for firms
There are reports that there are also plans to hike the tax on gas for firms to encourage them to move over to renewable energies. Allegedly, the Chancellor wants to equalise the tax on gas and electricity.
5. IR35 rule change for the ‘synthetic’ self-employed
A crackdown on certain self-employed workers may be on the way, according to a report by the BBC. Hammond is targeting those who take on work as a private services company but are hired by employers, meaning that they get a national insurance tax break.
Changes to the rules would see these workers paying the same national insurance rate as employees rather than paying the self-employed rate.
6. Increase in beer duty
The government is planning to increase beer duty by 3.5% adding 4p to the cost of a pint.
This will put further strain on pub owners. Figures from the Campaign for Real Ale reveal that 18 pubs a week are shutting in Britain, with a whopping 476 closing in the first half of 2018. That’s 13 more than in the last six months of 2018.