Chancellor’s Autumn Statement summary and reaction
Chancellor Philip Hammond announced a number of measures that will affect small firms in the Autumn Statement 2016.
The key points from the Statement are:
A new National Productivity Investment Fund (NPIF) will provide £23 billion of investment in housing, transport, digital communications and science and innovation by 2021/22.
Further steps have been announced for the allocation of the Local Growth Fund, including up to £1.8 billion allocated through a third round of Growth Deals with Local Enterprise Partnerships.
Arrangements for the Northern Powerhouse Investment Fund and Midlands Engine Investment Fund, which will begin making investments in 2017.
A new Industrial Strategy Challenge Fund will support collaboration between business, researchers and the science sector. The fund will be managed by Innovate UK and research councils.
Additional funding will be allocated to increase research capacity and business innovation, including a significant increase in grant funding available through Innovate UK.
UK Export Finance (UKEF) will double its total risk appetite (the level of risk UKEF will take to achieve its objectives) to £5 billion and increase its capacity to provide support in individual markets by up to 100%.
The number of pre-approved currencies in which UKEF can offer support will increase from 10 to 40 to enable more overseas buyers of UK exports to pay in their own currency.
HM Treasury will lead a review to identify barriers to access to long-term finance for growing firms.
The British Business Bank will invest an additional £400 million in venture capital funds to unlock up to £1 billion of new investment in innovative firms.
Up to £13 million will be allocated to support firms to improve their management skills by implementing Sir Charlie Mayfield’s review of business productivity.
From April 2017 the National Living Wage will be set at £7.50.
From April 2017, the National Insurance secondary (employer) threshold and the National Insurance primary (employee) threshold will be aligned.
From April 2017, where the public sector engages an off-payroll worker through their own limited company, liability to pay the correct employment taxes will move from the worker’s own company to the public sector body or agency/third party paying the company.
A new 16.5% Flat Rate VAT rate will be introduced for limited cost traders (businesses with low cost bases) from 1 April 2017.
The amount of investment social enterprises aged up to seven years can raise through Social Investment.
Tax Relief will increase to £1.5 million from 6 April 2017.
From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income.
Rural business rate relief will be doubled from 50% to 100% from 1 April 2017.
As announced at the 2016 Budget, the main rate of corporation tax will be reduced to 17% in 2020.