Budget break down 2017: tax rises and Business Rates relief

Posted on 08/03/2017 · Posted in Palm PR

In the final Budget before the triggering of Article 50, Chancellor Phillip Hammond has announced a number of financial measures that will affect British businesses operating in the Food & Drink industry.

The Budget was short of big announcements or significant changes, ensuring that Hammond has flexibility in the future to respond to the post-Brexit economic landscape

Business Rates Relief

  • Business rates are in effect the commercial version of council tax, and are paid on the rental value of the space that businesses occupy. The amount depends of the size of the property and what it’s used for
  • £435m has been put aside to mitigate the negative effect of the Business Rate rises that will come into force in April 2017
  • £300m will be given to local councils to offer discretionary relief to the worst-hit firms
  • Small businesses set to lose their rate relief in the planned revamp will see increases capped at £50 a month
  • 90% of pubs will get a £1,000 discount on business rates bills in 2017

Tax rises

  • Reduction in tax-free dividend allowance for shareholders from £5,000 to £2,000. This will come into force from April 2018 and will see business owners and shareholders that are paid dividends charged more tax
  • The main rate of Class 4 National Insurance contributions for self-employed people is to increase by 1% to 10% in April 2018 and 11% in April 2019, at an average cost of 60p a week to those affected.
  • Confirming George Osborne’s levy on drinks, the Sugar Tax will come into effect in April 2018. Drinks with more than five grams of sugar per 100ml will incur a 18p per litre levy. Those with eight grams or more of sugar per 100ml will be taxed 24p per litre. For more details, read our blog here
  • Businesses with loss-making capital assets will no longer be able “to obtain an unfair tax advantage by converting those losses into more flexible trading losses”. The changes will take immediate effect from Budget on 8 March 2017

Tax cuts

  • The personal tax-free allowance is to rise as planned to £11,500 from April 2017 and to £12,500 by 2020