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The biggest change that the Autumn Budget 2017 presented for small business owners was simply that a Budget happened in the autumn as well as the spring! There was remarkably little in the Chancellor’s announcement (or the accompanying full Budget report) for freelancers, contractors or other small business owners who do not have their own business premises – but here is some insight from Emily Coltman FCA, chief accountant to FreeAgent, which provides cloud accounting software for freelancers, micro-businesses and their accountants.
No change to the VAT registration threshold for two years
Since the Office of Tax Simplification published its report on VAT earlier this month, various rumours have been circulating about whether the Chancellor would change the threshold for VAT registration in the Autumn Budget. In the event, he opted to freeze the VAT registration threshold at its current level of £85,000 for two more years from April 2018. While this isn’t the big change that some people were expecting, it is a departure from the norm as the VAT registration threshold usually rises every year.
Potential reduction in rates
If you run your business from rateable premises, then you’ll find your rates rising by the lower Consumer Prices Index as opposed to the Retail Prices Index. And if you were affected by the so-called “staircase tax”, which meant that businesses using office spaces separated by communal stairs, lifts or hallways were charged higher rates, you will be able to apply to have that rate assessment lowered.
Making Tax Digital (MTD) plans unchanged
The Chancellor did not mention MTD at all in his announcement and, digging deeper into the full Budget report, it’s apparent that the plans for rolling out the initiative haven’t changed. MTD will not become compulsory until April 2019 and then only for VAT and for businesses with annual sales over the VAT threshold.
Diesel tax increases to affect cars only
From April 2018, any new diesel cars that do not meet the “clean diesel” criteria will be subject to increased car tax. This will apply only to cars, not to vans, so if you own and use a diesel van in your business, you will not have to pay any additional tax on it.
In summary, while there were a few points of interest for small business owners, this Budget can be described very simply as “business as usual, no major changes”.
*Emily Coltman FCA is Chief Accountant to FreeAgent, which provides cloud accounting software for freelancers, micro-businesses and their accountants. Try it for free at www.freeagent.com