The Budget in a nutshell – no great shakes but likely to hit the self-employed and small companies the hardest.
The Chancellor has suggested that the economy is performing better than predicted in 2016, yet still has concerns about the level of borrowing. Even though the rate is falling, at £100bn more than anticipated by 2020, this was a very cautious budget with suggestions that public expenditure needs to be managed carefully.
A key announcement likely to affect businesses is the hike in NI contributions for the self-employed to 10% in April ‘18 and 11% in April ‘19. This will raise £145m for the public coffers by 2020. It is a contentious issue as it goes against what was stated in the Tory Party manifesto during the election.
No big shocks in terms of taxation, as it was previously suggested that the personal tax allowance will increase from £10,600 to £11,500, and the higher rate threshold will increase from £43k to £45k. Corporation tax will reduce from 20% to 19%.
The one to watch in Wales is business rates – with proposed plans for a rates discount for pubs and a cap on rate increases for small businesses in England will Wales follow suit? As business rates is devolved, it is likely that Wales might receive additional funding to ease the pain.
An increase of £200m in the Welsh Government’s budget over 4 years is small change in comparison to the increases in spend in England.
Greater assurance would have been welcomed with regards to the Tidal Lagoon project in Swansea, rather than a statement that they are still in discussions and looking at reports.
All in all nothing to write home about, but more needs to be done to ensure that entrepreneurial spirit remains strong in Wales.