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Spring Budget 2017: What does it mean for UK businesses?

Yesterday (March 8) saw the Chancellor deliver his inaugural Budget with a swaggering, quip-laden performance from the dispatches box, as he unveiled a string of low-key measures aimed at steadying the economy ahead of the UK’s Brexit negotiations.

Despite being buoyed by better-than-expected tax receipts, and an upgrade in the economy’s growth forecasts from the Office of Budgetary Responsibility (OBR), Hammond opted against a Government spending splurge, adopting a customarily cautious approach that could actually entail tax rises for some workers and doing little to remedy the growing inflation squeeze.

So what might the impact be for businesses?

One of the headline announcements, and the one for which Hammond has drawn the most ire in aftermath of yesterday’s Budget, is the decision to increase the Class 4 National Insurance Contribution (NIC) rate for the self-employed from 9% to 11% by 2018.

While the move aims to bring NICs of the self-employed in line with the rest of the UK workforce, the hike was immediately branded a ‘sole trader’s tax’ by detractors amid criticism that the increase would stifle entrepreneurialism and dissuade individuals from setting up shop on their own.

In his immediate response in the Commons, the leader of the opposition, Jeremy Corbyn, branded Hammond’s announcement as a ‘Budget of utter complacency’ and one that was ‘out of touch with that reality of life for millions’, but failed to score any real points against the Chancellor’s plans.

Elsewhere, the widely expected relief efforts for businesses facing massive increases in their business rates this April were revealed, with the government setting aside a pot of £435m to help soften the blow.

This includes a £300m fund for local authorities to dish out to the worst-hit businesses, a cap of £50 per month on increases for businesses coming out of small business rates relief and relief for 90% of the UK’s pubs.

Digital and transport infrastructure also received a cash boost, with £16m to be funneled into 5G trials and a further £200m committed to full-fibre broadband networks in rural areas, while £690m has been promised to improve roads and local transport across the UK.

Businesses react

Is the moves to remedy business rates hikes enough? Does the national insurance increase for the self-employed really level the playing field or is it just a thinly veiled tax grab?

Bdaily’s editors put these questions to businesses across the UK in the immediate aftermath of the Spring Budget:

North East business reaction

Yorkshire business reaction

North West business reaction

London business reaction

As ever, if you have any thoughts on the Chancellor’s announcements and how they might impact you or your region, contact the Bdaily editorial team at editor@bdaily.co.uk or leave your comments below.

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