On Wednesday 8th March, Chancellor Philip Hammond will present the last ever Spring-time Budget. From then on we will have Budget day in Autumn and ‘fiscal updates’ in Spring. Time will tell whether future Chancellors can really resist the temptation to return to bi-annual budgets and all the political jamboree that involves.
But what can small businesses and the self-employed expect this month from the Chancellor’s red box?
VAT and IR35
Here at Crunch, we hope Mr Hammond will change course on plans for the VAT Flat Rate Scheme and public sector IR35 rules. We’ve been making the case to MPs across all parties that these changes will cause more harm than good. It’s not too late to add your voice to our campaigning by signing up to Crunch Chorus.
Making Tax Digital
We also expect confirmation of the thresholds over which business rates revaluation will be compulsory for businesses. This has been the subject of heated debate, with many proposing increasing the thresholds, but we suspect HMRC has been fighting hard to stick to the current £10,000 annual threshold.
Brexit and business rates
We don’t expect any major giveaways, as the Chancellor will be holding back some flexibility to handle any future Brexit-related turbulence, but we wouldn’t rule out some small tweaks to the benefit of some in the ‘squeezed middle’ which is Theresa May’s policy focus.
There has also been suggestion from Theresa May and local government minister Sajid Javid that some funds will be made available to head off a rebellion over the business rates revaluation. However, we wouldn’t expect too much from this, as major change is beyond what the Chancellor thinks he can afford right now.
Modern working practices
Finally, we expect further reviews to be flagged in relation to tax and the changing world of work. This is partly in response to Matthew Taylor’s review of ‘modern working practices’ for the Department of Business, Energy, and Industrial Strategy, which has gained much attention, but doesn’t have tax within its remit.
Mr Hammond could start with having a look at our 20 policy ideas in ‘The Entrepreneurial Audit‘ we published with the RSA last month.