Things to watch out for in the UK Budget 2017
The British Chancellor of the Exchequer Philip Hammond will deliver the last Spring budget on Wednesday. It’s made against the background of the impending invocation of Article 50 to start the process of Brexit. But what should marketplace sellers be looking out for in the Budget?
It’s been well reported that the changes on the table to Business Rates have been met with a significant outcry from businesses who will be experiencing big rises. What’s particularly notable is that out of town premises, such as Amazon warehouses, will not experience similar hikes to establishments on already struggling High Streets. We’ve written about that here. Reports from parliament suggest that the Chancellor is, in particular, under pressure from Conservative backbenchers to give SMEs a break and amend the proposals. Will he take the Budget opportunity to delay, stagger or abandon the plans?
Self-employed NI contributions
There are plenty of rumours that suggest that the National Insurance contributions made by the self-employed (as opposed to those on PAYE) will be increased. There is a perception that the self-employed don’t pay enough in comparison to the employed, we also enjoy fewer rights needless to say when it comes to access to benefits if we need them, and an NI hike for the self-employed is seen as not only fair but a good revenue raiser. This sort of change could be very significant to anyone who works for themselves and that’s a lot of online merchants.
Inflation and Household Spending
Inflation is on the up and with benefits freezes and rising prices, the predictions are that soon households are going to start seriously noticing that they have less spending power. This specifically applies to what they’re calling JAMs – Just About Managing. We’ll see if the Chancellor has any concessions to people in this position. Anything which indicates that households have less to spend is bad news for any retailer – large or small- because it can hit your sales.
Flat Rate VAT
In a period of growing inflation, it’s highly unlikely that the Chancellor will reduce the VAT rate of 20%. Not least because it’s a vital earner for the Government. But it’s possible that proposed changes to the Flat Rate VAT system might be amended. You can read more about that here.
I think the budget today tells us two things.
1. This government is the friend of business – but only the corporate multinationals (who get a tax cut).
2. If you are self-employed, you have no champion in this country and are on your own.
I believe this is the start of a campaign by the government to attack small businesses and the self employed and there is more to come in the autumn budget.
A process begun by George Osborne (remember the tax crack down that led to small businesses being hounded but multi-nationals got sweetheart deals?) is now gaining momentum.
Quarterly tax returns – no good reason for this – adding to the time and cost of running a small business.
Vat scheme changes – these have worked fine for years – why create more problems unnecessarily?
NI rises – the arguments against this are clear – the self employed are already disadvantaged by the system in all kinds of ways – this makes it worse.
What exactly have Hammond and May got against small businesses?
Or is it simply that, as they lack the clout of big businesses and unionised employee sectors, they can simply be picked on?
They take from the disabled, they take from those on benefits, they take from low-income families and now more from the self-employed which includes many of the former, but what do they take from their rich friends? And if you happen to have a large corporation you might even be able to negotiate your own tax bills with HMRC.