Notable changes for small businesses are listed below:
- Although there is no change to the rate of corporation tax, maintained at 19%, HMRC is to freeze indexation allowance on corporate capital gains for disposals after 1 January 2018.
- From April 2018, business rate rates will rise by any increase in the Consumer Price Index (CPI) rather than the Retail Prices Index (RPI). The change has been brought forward two years. Historically, the RPI has tended to be higher than the CPI.
- Pubs with a rateable value up to £100,000 will continue to receive a £1,000 discount next year.
- Changes are to be made to the Enterprise Investments Scheme, the Seed EIS and Venture Capital Trusts. The aim is to target Venture Capital Schemes on companies where there is a real risk to the capital being invested, and will exclude companies and arrangements intended to provide ‘capital preservation’. EIS and VCTs will also see increased limits for investments in knowledge-intensive companies.
- The diesel car supplement is to be increased from 3% to 4% from 6 April 2018. This will increase the company car tax and car fuel benefit charge (for company cars provided with an element of private use).
- The VAT registration threshold is to be maintained at £85,000 until 31 March 2020.