Earlier this month, the Chancellor, Philip Hammond, delivered the 2018 Spring Statement. This was the first of this format after the government announced 2017’s would be the last large Spring Budget. The statement was shorter, providing more of a brief overview.
Although the statement did revise the growth forecast (up from 1.4% to 1.5% in 2018) and highlighted the predicted reduction in borrowing (1.8% of GDP for 2018-19), the Chancellor focussed on outlining consultations and upcoming plans – many of which will have an effect on small British businesses.
Hammond claimed the Conservatives are ‘the party of small businesses and the champions of the entrepreneur,’ but does the Spring Statement engender this statement?
Revaluation of Business Rates
Business rates have been a sticking point for small UK firms, but the Spring Statement has improved this. The next review of business rates was due in 2022 but has been brought forward to 2021. It was also announced that revaluations will now occur every three years, as opposed to the current five. This move means that rates will align with the value of rental properties and ensure that changes offer minimal disruption to businesses.
Apprentices and Business Growth
The government previously outlined plans to provide three million apprenticeships by the year 2020 in a bid to boost the economy, lower unemployment figures and help small businesses and entrepreneurs. In the Spring Statement, Hammond also set aside a further £80m to assist small businesses in finding and hiring apprentices.
New Ecommerce Tax System
Tax avoidance has long been a topic of contention, with large multinational firms avoiding £6bn in UK tax in 2016 alone. In the latest attempt to tackle this, the government has outlined plans for a new tax system for online sales. This will aim to ensure that multinational digital companies pay tax and contribute their share to the UK tax system.
Investment in Broadband
With the business world becoming increasingly digital and tech-focussed, the Spring Statement built on the infrastructure promised in the Autumn Budget. In addition to the £190m allocated for UK-wide fibre broadband, Hammond also announced an additional £95m for 13 different regions, to provide businesses with better and securer services.
Consultation on Cash
With the rise of digital wallets and the boom in ecommerce, there has been much debate about the future of cash, with some experts predicting that cash could be obsolete within the next twenty years. As such, the government has proposed a consultation on cash, to assess its future and ensure there are processes in place to support those businesses that continue to use it.
End of Late Payments
In the Spring Statement, the government have acknowledged the financial difficulties that late payments can cause self-employed individuals, entrepreneurs and small businesses. In a move to end late payments, a consultation will be held. The government are asking for this affected to provide information, to ensure an effective solution can be found.
Although brief (the Spring Statement speech lasted only 26 minutes) it does outline some positive changes for UK small businesses and entrepreneurs. Plans could help businesses to source new apprentices, access better broadband facilities and prepare for a cashless future.
However, as always it is important for small businesses to focus on boosting cashflow – particularly with the Brexit deadline looming – and make savings where possible. This could include invoice factoring, reassessing your business electricity and utility management options, or considering telecommuting.