Last year was a turbulent one for UK businesses with many are hoping for more stability in 2017. However, as Brexit and the negativity it is creating, continues to dominate the headlines, many UK companies are treading carefully as we enter 2017.
Teresa May outlined plans for Brexit this week in Davos announcing that the UK will trigger EU exit talks by April. The key aims were:
• Leaving the European single market
• Leaving the European Union’s customs union
• Protecting the rights of UK citizens in the EU and EU citizens in the UK
• Parliament to vote on the final Brexit deal reached between the UK and EU
However, despite some of the negative headlines, Adam Marshall, director general of the British Chambers of Commerce (BCC) believes UK business’ will continue as usual into 2017. He said:
‘In business, what you achieve in a negotiation – not what you bid for – is what really matters.
‘The Brexit process is no different. While businesses now have a clearer sense of the Prime Minister’s top-line priorities, they will come away from her speech knowing little more about the likely outcome of the Brexit negotiations than they did yesterday.
‘The simple fact is that businesses across the UK are carrying on. Directly-affected companies are being pragmatic, and are preparing for a range of possible outcomes.
‘Away from Westminster, many businesses are ignoring the Brexit ‘noise’ completely, and say there needs to be a far bigger focus on getting the basics right here at home. Their message is that Brexit must not become all-consuming, and that having the right skills, infrastructure and business environment across the UK will play a far bigger part in our future success than any eventual Brexit deal.’
Plans outlined in the Autumn Statement will be introduced this year. Philip Hammond pledged to plug an additional £400 million into venture capital funds through the British Business Bank, unlocking £1 billion of new finance to help growing UK firms.
Incentives to support business were discussed with measures to tackle tax evasion, avoidance and aggressive tax planning.
The government outlined its plans in a Business tax road map which shows changes in tax to 2020. According to the road map, the following tax changes will be introduced in 2017:
• Corporation tax cut to 19%
• Business Rates: – double Small Business Rate Relief (SBRR). Increase the lower threshold to £12,000 and the upper threshold to £15,000. Increase starting threshold for higher multiplier from £18,000 to £51,000. Standardise business rate bills and ensure ratepayers have the option to receive and pay bills online
• Tax deductibility of corporate interest expense: rules will be introduced for addressing base erosion and profit shifting through interest expense from April 1.
• Addressing hybrid mismatch arrangements: rules were introduced for addressing hybrid mismatch arrangements from January 1.
• Reform corporation tax loss relief: for losses incurred from April 2017, enable companies to use carried forward losses against profits from other income streams or other companies within a group for taxable profits in excess of £5 million, restrict to 50% the amount of profits that can be offset through losses carried forward
• Greater London local authorities will get powers to collect business rates rather than getting a proportion from central government