A number of measures which have been designed to boost business and productivity were announced in the 2017 Autumn Budget. Below we give a round-up of some of the most significant announcements made by the chancellor.
Chancellor Philip Hammond revealed that future business rate increases will be determined by the Consumer Prices Index measure of inflation from April 2018.
The measure will come into effect two years earlier than originally planned and will replace the Retail Prices Index, which determined the controversial 3.9% rise announced in October 2017.
Dr Adam Marshall, director-general at the British Chambers of Commerce, commented:
“While more remains to be done to reduce the impact of business rates on investment and growth, the chancellor’s decisions will lessen the impact of rate rises on hard-pressed firms.”
Corporation tax remains at 19% and is on track to be lowered to 17% by 2020. Additionally, the VAT threshold will remain unchanged at £85,000 for the next two years.
Research & Development
Hammond has also pledged to invest a further £2.3 billion into R&D. This will see an increase to its main tax credit – the Research and Development Expenditure Credit (RDEC) which applies to larger companies – from 1 January 2018.
Investment limits increase
Investment limits for enterprise investment schemes will be doubled from £1 million to £2 million from April 2018 for knowledge-intensive companies only.
National living wage
Employers will need to keep an eye on increases to the national living wage. This has gone up by 4.4% to £7.50 an hour in 2017/18 to £7.83 an hour for those aged over 25 in 2018/19.
The national minimum wage rates will also increase for under-25s as follows:
- Apprentices: £3.70 per hour
- 16 and 17-year-olds: £4.20 per hour
- 18 to 20-year-olds: £5.90 per hour
- 21 to 24-year-olds: £7.38 per hour
Personal allowance increases
The tax-free personal allowance has increased by £350 a year – up from £11,500 in 2017/18 to £11,850. The higher-rate threshold will rise from £45,000 to £46,350 from 6 April 2018.