Statement in response to today’s Spring Budget 2017 from Nick Paterno, Managing Partner at McBrides Chartered Accountants.
“With two Budgets this year, today felt like the first act of a two part performance. Leading man Philip Hammond delivered his monologue confidently peppering his speech with jokes, but in the end he didn’t give much of the plot away.
“There was good news with the Office for Budget Responsibility (OBR) now forecasting that the UK economy will grow by 2% in 2017, although growth forecasts for 2018 – 2020 were downgraded. And there was good news for care providers with a promised £2bn for social care. But if you are self-employed you could be forgiven for boo-ing the increase in Class 4 NIC’s and the lowering of the tax-free dividend allowance for shareholders cut from £5,000 to £2,000 from April 2018. This dividend allowance measure was only introduced in 2016!
“Matthew Taylor is leading a review of employment practices and has shared his preliminary thoughts with the Treasury, namely that the current tax system is a big factor in driving the move toward self-employment. In response, the Chancellor has tinkered with Class 4 NIC’s and the main rate will increase to 10% in 2018 with a further 1% rise to 11% in 2019. A lot of emphasis was given to this moment at the dispatch box and the audience may well be forgiven for asking: “is there more to come for the self employed?”
“The Chancellor ruled out the abolition of business rates but did promise to look at ways of taxing the digital economy but only promised to do this in “due course”, to pantomime groans from the House of Commons.
“There was some welcome news for businesses losing Small Business Rates Relief with any increases promised to be capped at £50 per month. And there was better news for pubs who will receive a £1,000 discount if their rateable value is less than £100,000 (90% of pubs).
“Small Businesses with turnover under the VAT threshold will have an extra year (April 2019) to prepare for Making Tax Digital which will be a welcome deferral.
“As the curtain went down at the end of Act One, there were many in the the UK and wider global audience wondering what will happen in Act Two come the autumn and following the triggering of Article 50.”
McBrides Chartered Accountants
Established for over 40 years, McBrides Chartered Accountants advise private clients, owner-managed businesses, fellow professionals and corporate groups across a wide range of sectors. They provide in-bound accountancy and tax services to overseas businesses looking to expand or relocate in the UK.
Their team of almost 50 partners and staff are based at their offices in Sidcup, on the South East London / Kent borders. McBrides are known for their commercial and practical approach to business and finance.