October 30, 2018 A Budget for Business Growth
The Chancellor of the Exchequer, Philip Hammond, may have set up his 2018 Budget as “A budget for hard working people” but there was plenty in the detail for businesses to digest. In a good news/bad news scenario we will swiftly pass over announcements that the Government will not enter into any future PFI contracts and the expected increases in the National Living and Minimum wages and move on to look at some of the measures designed to help business.
- Property, plant & machinery. The Annual Investment allowance is to be increased from £200,000 to £1million for qualifying investments in plant & machinery in 2019 & 2020. In addition from April 2019 the capital allowances special rate for plant and machinery is to be reduced from 8% to 6%. Furthermore a structures and buildings allowance of 2% is to be introduced on all non-residential structures and buildings for contracts entered into after 29 October 2018. And of course there is the much-heralded reduction in business rates for small retail businesses including pubs, cafes and restaurants.
- Start up loan funding. The Government is to extend the funding of the British Business Bank’s start up loan programme to 2021.
- Apprenticeships & training. A number of measures have been announced here including a measure to enable levy paying employers to transfer up to 25% of their fund to pay for apprenticeship training within their supply chains. Funds are also to be provided to halve the co-investment rate for apprentice training to 5% and to enable apprenticeship bodies to identify and remedy gaps in the apprenticeship training provisions. Existing employee skills also come in for a boost with £100m being made available as the first phase of a National Retraining scheme; enabling workers to retrain or up-skill. Funds are also to be made available for a Small Business Leadership Programme, the expansion of the Knowledge Transfer Partnership scheme and to support local peer-to-peer networks which are focused on business improvement.
- International trade. Measures here include an increase in the direct lending facility which provides fixed rate finance to overseas buyers who choose UK goods and services. Investment links with global partners and the overseas network in Europe are to be strengthened whilst HMRC has committed to halving the time taken for businesses to become “customs trusted traders.” In addition, e-passport gates are to be modified to encompass travellers from USA, Canada, Australia, New Zealand and Japan; smoothing their entry into the country.
The full suite of Budget documents can be found here: https://www.gov.uk/government/publications/budget-2018-documents