(1) Increased support for research and innovation
(2) Support for a cleaner environment
Air quality in many of the UK’s cities is very poor and a £220m “clean air” fund was announced. There will also be a range of initiatives to promote investment in electric cars, with £400m pledged for a new charging infrastructure and £40m invested into improving charging technology. The current law will be clarified so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year. Diesel car drivers will start to face higher taxes from April 2018. The first year VED rate for diesel cars that do not meet the latest standards will go up by one band. In addition, the existing diesel supplement in company car tax will rise by one per cent.(3) Support for businesses with global aspirations
(4) Support for high-street businesses
Business rates have been a controversial topic for some time and the news that the government will be piloting a 100 per cent business rates retention in London next year was welcomed. In addition, the planned switch from basing the cost of rates against the RPI (retail price index) to the CPI (consumer price index), will be brought forward by two years to April 2018, after concerns about potential costs of the annual uprating business rates in April. This is expected to provide business rates relief to the value of £2.3bn or more over the next five years. There is also an extension to the existing support available for small pubs and restaurants. This extends the current £1,000 discount for pubs with a ratable value of less than £100,000 for another year, to March 2019.(5) No reduction to the VAT threshold
There were numerous rumours leading up to the Budget 2017 that the VAT registration threshold would be cut by as much as 50 per cent. Effective for businesses with a turnover of £85,000 or more, UK’s VAT threshold is currently the highest in the OECD – Germany’s is just £15,600, for example. Economists argue the high VAT threshold distorts competition, plus dis-incentivises business growth and they have been making cases for it to be reduced. However, the threshold being set at a relatively high level also means that the majority of the UK’s smallest SMEs do not have to charge VAT, which helps them obtain and retain business. Taking these factors into consideration, Philip Hammond announced he would not cut the threshold as rumoured and whilst a consultation process will be started, the threshold will be maintained at £85,000 for the next two years. Continue onto the next page for the five remaining reasons Autumn Budget 2017 is good news.Share this story
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