Impact of the Budget for Family Businesses

It will come with little surprise that the second budget of 2017 failed to offer significant headline announcements, despite the rumour mill going in to overdrive during the past few days.

The Chancellor delivered a budget speech based predominantly on the economic climate, with specific focuses on growth and debt, especially given the backdrop of the impending ‘Brexit’ effect.  Growth and decreasing unemployment bring optimism for a post ‘Brexit’ Britain and offer some reassurance to family business owners - although there will be challenging obstacles ahead.

The predictions earlier this week suggested that the VAT registration threshold would reduce significantly, although thankfully this has not come to fruition.  Not just saving the businesses which would have been affected by increased administrative duties - and further pressure on margins - but also allowing more time for them to get ready to enter the Making Tax Digital system.

The workforce within a family business are usually seen as an extension of the family, although the increase in National Living Wage (NLW) will place a minimum 4.4% salary cost increase from April upon many businesses.  The likely impact of this will be even higher when employer National Insurance Contributions (NIC) and auto enrolment responsibilities are considered.

Companies have been targeted through increases in the cost of providing employees with a company car and the freezing, and subsequent removal, of indexation relief when assets are disposed of.  However, companies which engage in research & development have seen the tax credit rate increase by 1% to 12% and fuel duty has once again been frozen.  From April 2018, allowing employees to charge their electric vehicles whilst at work will no longer be a benefit in kind!

The future will be interesting for all businesses, although challenges and change brings about innovation and adaptation, which usually stimulate growth and will ensure family businesses continue to thrive.

Contact Steven for advice following the recent budget on how this will affect you and your family business.

Contact Steven

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter

Subscribe

Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575

or

Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW