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Autumn Statement 2023 What does it mean for businesses?
An update from Nick Gregory, Operations Director at Dorset Growth Hub.
As ever, there are a multiplicity of views on whether the Budget was a good thing, a bad thing or really neither one thing nor another. This can depend on your political views or where you are in the ecosystem. It may be that you happen to be fortunate and the budget is helping you or it may be that you are adversely affected. You can go to the internet and read the whole 120 pages plus the OBR report …or maybe not!
Overall the economic outlook is not great. All parties agree that growth is key to the success of UK PLC; predictions are for very low growth over the next 2-3 years and both inflation and interest rates remaining stubbornly high, inflation effects of a turbulent world economy have largely wound out now and a lot of the 4.7% left is due to home-based factors which are much harder to get out of the system.
I will try to focus on how the changes announced may affect a Dorset business and whether there are benefits or not for you.
The important changes can be put in several categories:
1) national insurance reform for the employed and self-employed
2) business rate relief
3) living wage increase
4) business tax cuts
5) late payment reforms
6) simplified R&D relief
There are a host of other changes, but these are probably the most important:
1) Changes in national insurance rates are a benefit to those in work rather than those on benefit. The government estimates:
An average nurse on £39,800 will gain £510 per year and a self-employed plumber on £34,410 will be £410 better off. Finally, a family with 2 earners could benefit by up to £900 per year. This will hopefully increase overall spending power and directly help those small business owners who are not limited companies.
2) The business rate relief for the retail and hospitality business of 75%, will become permanent. This is a big boost for hotels, restaurants and High Street shops.
3) The increase in living wage will of course be good for employees, but could increase the wage bill for a small company. Not only does the living wage go up from £11.44 but the age limit at which it cuts in will be 21 and not 23 years of age.
4) Investment in British business is historically lower than our European competitors, so granting full relief of 25p in the pound on new machinery and equipment is a big help for a business wishing to invest and grow.
5) As smaller businesses are often at the bottom of the pile when it comes to being paid on time, some of these reforms may help to get better payment terms based on the idea that 30-day terms should become the norm…
6 Many businesses, especially start-ups, spend a huge amount in the early years on research and development. Getting a tax refund for this effort is currently quite a difficult process, and hopefully the new measures will help.
Overall there is some positive news for small businesses, but the key message is to keep on doing what you are doing, just do it a little better.
The Dorset Growth Hub is here to give free advice and support to all Dorset Council based businesses.
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