≡ Menu

Autumn Statement 2015 – impact on small businesses

The Autumn Statement has become more of a ‘mini Budget’ in recent years, and this year’s event didn’t disappoint in terms of theatre. Here we look at the announcements which affect small businesses.

Autumn Statement Small BusinessDespite the country spending way beyond its means, a reasonably buoyant outlook has enabled the Chancellor to budget for higher than expected funds to be available over the next four years. As a result, he was able to perform spectacular u-turns over his plans to cut tax credits, and proposals to reduce police spending.

The Government says that the annual deficit has halved since 2009/10, and despite the costly measures mentioned above, the Chancellor expects the Government to be running a surplus within 4 years. Of course, this assumes that the economy will continue to grow at around the 2.5% level over the duration of this parliament.

In terms of new legislation which affect businesses, the Autumn Statement mainly confirmed the introduction of measures that had been announced previously.

Main points for business owners

  • The dividend tax increase, announced during Budget 2015, will go ahead as planned from April 2016. Most limited company owners will pay significantly more tax as a result.
  • The Annual Investment Allowance (AIA) will remain at £200,000 until the next election. But, as previously announced, the AIA will be cut from its current £500,000 level in January 2016.
  • IR35 was not mentioned at all within the Autumn Statement, although the Government is still digesting responses to its recent consultation, and changes may still be on the cards for next year.
  • Help to Buy equity loan scheme will be introduced to help Londoners buy properties.
  • There will higher stamp duty rates on second home purchases, and from CGT on the proceeds of second home sales will be payable within 30 days, from 2019.
  • Freelancers who work via an umbrella company, or are caught by IR35 (working via their own limited company) are to have their travel and subsistence expenses restricted from April 2016.
  • The Government is going to create new Enterprise Zones, taking the total to 26, with one-third of new zones to be placed in the North.
  • Small Business Rate Relief (which means the smallest businesses do not have to pay business rates at all) will be extended for another year. 600,000 business will benefit from paying no rates, or benefiting from taper relief.
  • All businesses will be provided with an online HMRC account by 2017, providing firms with quarterly updates on their tax affairs.
  • The rumoured changes to the Entrepreneurs’ Relief regime did not materialise, and the current CGT rates remain unchanged.
  • The Government has committed just under £7bn to science / research over the next 5 years.
  • An ‘Apprenticeship Levy’ will come into effect in April 2017, at 0.5% of employers’ wage bills, to fund 3 million new apprentices by 2020. This won’t affect small businesses until their total wage bills hit the £3m mark.
  • A £400 million ‘Northern Powerhouse’ investment fund will be created.

Useful Resouces

Access the full Spending Review documentation (blue book) here.

Hiscox Business Insurance
Pay with monthly direct debits
Qdos Tax Enquiry Insurance
Cover just £99/year