A range of measures designed to boost business and productivity were announced in Autumn Budget 2017.
Amid a background of discontent surrounding business rates, chancellor Philip Hammond revealed future increases will be determined by the Consumer Prices Index measure of inflation from April 2018.
The measure comes into effect two years earlier than originally planned and will replace the Retail Prices Index, which determined the controversial 3.9% rise announced in October 2017.
Dr Adam Marshall, director-general at the British Chambers of Commerce, said:
“While more remains to be done to reduce the impact of business rates on investment and growth, the chancellor’s decisions will lessen the impact of rate rises on hard-pressed firms.”
Corporation tax remains at 19% and is on track to be lowered to 17% by 2020, while the VAT thresholds remain unchanged for the next two years.
Hammond also pledged to invest a further £2.3 billion into R&D, which sees an increase to its main tax credit – the Research and Development Expenditure Credit (RDEC) that applies to larger companies – from 1 January 2018.
Investment limits for enterprise investment schemes will be doubled – from £1 million to £2 million – from April 2018 for knowledge-intensive companies only.
Employers will need to keep an eye on rises to the national living wage – up 4.4% from £7.50 an hour in 2017/18 to £7.83 an hour for those aged over 25 in 2018/19.
The national minimum wage rates will also increase for under-25s as follows:
- apprentices: £3.70 per hour
- 16 and 17-year-olds: £4.20 per hour
- 18 to 20-year-olds: £5.90 per hour
- 21 to 24-year-olds: £7.38 per hour.
The tax-free personal allowance increases by £350 a year – up from £11,500 in 2017/18 to £11,850, while the higher-rate threshold rises from £45,000 to £46,350 from 6 April 2018.
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