Adrian Hemmings, partner at Simpkins Edwards LLP, commented:
“The Chancellor’s budget marked a significant departure from that of Mr Hammond’s predecessor. The silence from the opposition bench alone spoke volumes. In many ways it marked a new beginning focussed more on taxing individuals rather than making cuts in spending.
“Designed to address perceived imbalances, many of the tax increases were aimed at the Tory heartland signalling a shift to the central ground.
“Mr Hammond’s determination to ensure that individuals’ employment status should not be driven by tax implications, but rather by what is most appropriate for their business, led to one of today’s biggest announcements.
“From April 2018, the Government will raise (Class 4) NIC payments from 9% to 11% cutting discrepancies in tax regulations, which have made it advantageous to be self-employed. Mr Hammond also announced a reduction in the tax free dividend allowance falling from £5,000 to £2,000 from April 2018. This comes on top of the dividend tax rise of 7.5%, which was introduced from April 2016.
“One point of relief for small businesses will be the announcement that the Government will cap business rate rises at £50 a month for those leaving the small business rate relief.
“In addition to this, the Government has reconsidered the speed at which tax should be made digital, pushing this back by a year for businesses falling below the VAT threshold.
“This will come as welcome relief for many. It will also enable the introduction of quarterly tax returns online to be bedded in with larger businesses first, which we view as entirely sensible. This will give smaller businesses more time to prepare for what is seen by many as a major change.
“Pubs will also welcome the news that a £1,000 discount on business rates will be put into place if they fall below the rateable value of £1,000, which accounts for over 90 per cent of pubs.”
“Local authorities will also benefit from a £300m fund to deliver discretionary relief to target individual cases in their local areas.”
“Other good news included the reduction in taper rate for universal tax credits falling from 65% to 63% and plans to increase tax free childcare allowances.”
“Overall, today’s budget is reminiscent of one of the early budgets under Tony Blair, appealing to the middle ground. However, we’ve learned from the past that sometimes the more negative details emerge in the coming weeks and months so we will be watching closely to see how the initiatives will actually be rolled out.”