In an effort to get Great Britain “fit for the future”, Philip Hammond had delivered the UK’s Autumn Budget, with a range of new policies designed to shape the future of the UK’s economy post-Brexit. The new economic policies are set to affect businesses of any size.
The National Living Wage (NLW) and National Minimum Wage (NMW) Will Increase in the New Tax Year
The minimum wage that you can pay your employees will experience a rise in the new tax year. From April 2018, the NLW will increase from &7.50 per hour to &7.83 per hour.
On the same date, the NMW will also increase for each band to:
• &3.70 per hour for apprentices
• &4.20 per hour for 16 - 17-year-olds
• &5.90 per hour for 18 - 20-year-olds
• &7.38 per hour for 21 - 24-year-olds
Fuel Duty
Good news for companies who utilise a vehicle or fleet of vehicles, as the Chancellor has announced that the fuel duty will remain frozen for the eighth consecutive years.
The UK’s Economy
In order to grapple with the uncertainty that has plagued the UK Economy since the European Union Referendum, the prospects for growth and productivity have been downgraded.
In accordance with these new predictions, the growth forecast for 2018 has been cut from 2.0% to 1.5%. The expected GDP growth for the next 4 years has also been cut from 1.8% to 1.4%.
A side effect of lower growth forecasts, however, means an increase in the amount of money the government will need to borrow to make up the shortfall, with the chancellor providing &3bn to prepare for Brexit.
VAT Threshold for Small Businesses
The VAT Threshold for small businesses will remain at &85,000 per annum, with the Chancellor stating that the government understands the pressures facing small businesses face when it comes to development and growth. This will reportedly save 3 million small businesses &2.3bn in overall savings.
Income Tax rates, bands and the dividend allowance
In the new tax year, the Income Tax bands will increase. The new bands will be:
• Basic Rate increased from &33,500 to &34,500.
• Higher rate band &34,501 to &150,000 (a rise from &33,501 to &150,00)
• There are no changes applied to income of more than &150,000
There are no new changes to Income tax rates and tax rates applied to dividend income, however, it should be noted that the present &5,000 tax-free dividend allowance will still be reduced to &2,000 from April 2018.
It should also be noted that these rates will differ in Scotland, as the Scottish parliament sets the basic rate limit.