Anyone who was worried that the inaugural Autumn Budget 2017 would contain some nasty surprises for small businesses can breathe a sigh of relief. In the end, there was remarkably little that will impact freelancers, contractors or other small business owners who do not have their own business premises – but here’s what might be of interest to you.
Potential reduction in rates
There was good news surrounding business rates - if you’re a small business paying business rates for your 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.
VAT registration threshold frozen for two years
The Chancellor 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 had been expecting, it’s a departure from the norm, as the VAT registration threshold usually rises every year.
Making Tax Digital plans unchanged
There was no mention of Making Tax Digital (MTD) at all in this announcement and, digging deeper into the full Budget report, it’s clear 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 won’t have to pay any additional tax on it.
This article was written by Emily Coltman, Chief Accountant at FreeAgent, the online accounting software specifically designed for freelancers, contractors and micro-businesses, covering everything from invoicing to tax. Emily features in A Field Guide to Freelancer Finances, a free ebook of business finance tips – download your copy.