Small businesses are facing uncertain times due to doubt over Brexit, so it was a welcome relief to hear that VAT registration threshold was frozen for a further two years in the recent budget.
Business rates will be cut in a bid to boost the high street, entrepreneur’s relief will continue, and more SMEs can now access the Financial Ombudsman.
Mike Cherry, national chairman at the Federation of Small Businesses (FSB) said:
“The Chancellor has shown that he is now listening to the small business community. By acting on FSB’s recommendations for high streets, VAT and the Employment Allowance, the Treasury is set to provide some much-needed lifelines for thousands of small firms.
“The Chancellor’s decision to freeze the £85,000 turnover threshold for VAT registration until 2022 has saved the business community from disaster.
“This Government’s relationship with the self-employed community has been a mixed one. However, the Chancellor has rightly responded to our calls for greater funding for training within the self-employed community. We look forward to delivering the £10 million self-employment training pilot scheme announced today in Manchester.
“Small businesses on our high streets that cannot get Small Business Rate Relief will be delighted with the significant discount for the next two years, which on average will help these businesses to the tune of almost £2,000 each, but potentially up to around £16,000 off small businesses facing the biggest bills.
“A further fuel duty freeze will also provide welcome relief for small firms who rely on road transport, particularly as the cost of petrol has surged over the last year.”
Highlights of the 2018 budget:
- Personal tax threshold to increase from April 2019 from £11,850 to £12,500 for 20% tax payers and from £46,350 to £50,000 for 40% tax payers
- National living wage up from £7.83 to £8.21 per hour
- New 2% tax on UK revenues of large technology companies from April 2020
- Annual investment allowance increased from £200,000 to £1m for two years
- Business rates’ bill for companies with a rateable value of £51,000 or less to be reduced by a third over two years
- VAT threshold frozen for two years