Autumn Statement 2016: A Small Business Perspective
Chancellor Phillip Hammond claims “Britain is open for business”, but what do the announcements actually mean for enterprise?
The Autumn Statement 2016 was announced by the chancellor of the exchequer Philip Hammond, with the Runnymede and Weybridge MP claiming that “Britain is open for business.” – despite some uncertainty caused by Brexit.
Coming as a slight shock, Hammond announced that his first Autumn statement would also be his last – with the government committing to just one budget a year and the introduction of a spring statement in 2018.
Until then, small business owners have plenty to mull over from this year’s Autumn Statement. We take a look at the most important policies here:
£23bn National Productivity Investment Fund announced
A new National Productivity Investment Fund (NPIF) will provide additional spending to transport, digital communications, research and development (R&D), and housing – in a bid to boost British productivity.
The National Living Wage and the National Minimum Wage will increase from April 2017
The National Living Wage will increase from £7.20 per hour to £7.50 per hour from April 2017.
The National Minimum Wage will also increase:
- for 21 to 24 year olds – from £6.95 per hour to £7.05
- for 18 to 20 year olds – from £5.55 per hour to £5.60
- for 16 to 17 year olds – from £4.00 per hour to £4.05
- for apprentices – from £3.40 per hour to £3.50
And £4.3m will be spent on:
- helping small businesses to understand the rules
- cracking down on employers who are breaking the law by not paying the minimum wage
Corporation tax to fall to 17%
Corporation tax will continue to fall to 17% by 2020 and this is in-line will measures introduced in Budget 2016. Hoping to help benefit over a million businesses, this rate will be the lowest of any G20 nation.
Increased R&D funding for businesses
The government will invest £2bn more per year in research and development (R&D) funding by 2020-21. The increased investment will support scientific research and development of technologies including robotics, artificial intelligence and industrial biotechnology.
£1bn to be invested in full-fibre broadband and trialing 5G networks
Over £1bn will be invested in digital infrastructure in the hope to make the UK a “world leader in 5G”. From April 2017, 100% business rates relief will be provided for new full-fibre infrastructure for a five-year period.
£400m to be invested in growing innovative firms
The government, through the British Business Bank, will be investing £400m into VC firms to support scale-ups and smaller businesses.
UK Export Finance capacity doubled
UK Export Finance capacity was doubled – with the aim to make it easier for British businesses to export and receive insurance from the private sector.
Supporting management skills for businesses
Sir Charlie Mayfield’s review of business productivity will be implemented, with the government providing £13m to help businesses improve their management skills.
Investment in transport network
As part of the National Productivity Investment Fund, £1.1bn will be invested to upgrade local roads and public transport in a bid to reduce congestion. £220m will be invested to tackle road safety and congestion on Highways England roads with £27m put aside to develop an express way between Oxford and Cambridge.
Businesses who install electric charge points will be given a two-year 100% first year allowance, allowing them deduct the cost of the charge-point from their pre-tax profits in that year.
Fuel duty to remain frozen
In 2017, fuel duty will remain frozen for the seventh successive year, potentially saving drivers £130 a year on average.