UK Budget round up for marketplace sellers
The British Chancellor of the Exchequer Philip Hammond has delivered the 2015 autumn UK budget to the House of Commons. Obviously there are lots of measures included but this short article will look at the details a section revealed that are of specific to ecommerce SMEs and people involved in the wider marketplaces ecosystem. You can read a government digest here.
On the national level, it’s key that the Tresury and the OBR predict that economic growth will slow from previous forecasts, largely as a result of Brexit uncertainty. In 2017 it has been cut from 2% to 1.5%. The predictions for every year up to 2021 were also cut.
First up, the income tax personal allowance and the amount where the 40% higher rate kicks in have been increased. Coming into force in April 2018 they will be £11,850 for the basic rate and the 40% threshold increases to £46,350.
If your’re an employer, with staff over the age of 25, then changes to the National Living Wage will be of interest. It will be going up to £7.83 from £7.50 and they claim that will be worth £600 a year for full time employees.
On the rate of VAT, that hasn’t been changed. But there is an expectation that the threshold at which it is payable could be changed because a report to the government recently identified it to be a barrier to SME growth. A consultation on the £85k threshold was announced so there’s not going to be any change there any time soon.
Another measure that hasn’t come to pass that was expected by some is a levy on single use plastic products that would have impacted marketplace sellers and packaging costs. Hammond says the measure is still under investigation so it seems likely there will be a change there in a future UK budget.
Action on Business Rates was hoped for and there is some balm there. The chancellor said he would bring forward the planned business rate switch from RPI to CPI by two years so it will come into force in April 2018. He said this would save companies £2.3 billion. Hammond also said that 100% business rates retention will be trialled in London next year.
Tax on digital businesses is being reviewed and some changes will be made to take tax from offshored digital businesses that operate in the UK. This will likely impact the likes of Amazon and Google. And VAT from overseas sellers on marketplaces was mentioned fleetingly. Hammond recognised that the additional powers granted were not adequate and he plans more efforts to get the £1.2bn a year in lost VAT from online retails not based in the UK. He currently estimates that the take will be more in the region of £200 million.
There were some measures for R&D investment tax breaks revealed that will be of interest if you’re developing technology and the EIS scheme will also be extended. Outside of London and the South East there has been some additional money allocated to what the government dub “The Northern Powerhouse” and extra money for business development and in Scotland, Wales and Northern Ireland. So if you’re located in those ares then you might be able to take advantage there.
Of course the UK budget statement is accompanied by a massive budget document and it could well be that more details and measures emerge as the it is digested.
ummm, does this need a slight proof read…..
Wow, it really deos!