The Chancellor of the Exchequer presented his Budget to Parliament on Monday 29 October. Here are some key pieces of information that impact the engineering and manufacturing sector.
Business rate reduction
£900 million has been allocated towards reducing business rate bills for firms with a rateable value (based on the rental value of the property) of less than £51,000 by a third over 2 years. This is likely to be implemented in the next financial year.
The savings will automatically be applied to business rate invoices .
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Apprenticeship Levy changes
Smaller companies (with a payroll of less than £3 million) will receive a £695 million boost for hiring and training apprentices.
The amount they are required to contribute to the apprenticeship levy for training will be halved from 10% to 5%, and the government will pay the remaining 95%.
Large levy–paying employers will be able to transfer up to 25% (up from 10%) of their budget to smaller businesses for training for their apprentices. This includes those in their supply chain.
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Financial changes
The Annual Investment Allowance, which allows businesses to deduct the value of an item purchased from profits before tax, has been increased from £200,000 to £1 million (1 January 2019) for 2 years. From October 2018, 2% of the cost of any new non-residential buildings can be deducted before tax.
British Business Bank’s Start-Up Loans programme will be extended to 2021 so that mentoring and the provision of loans can continue.
UK Export Finance’s direct lending facility will increase by £2 billion. £200 million will go to the British Business Bank to replace the EU investment bank if needed. The New Enterprise Allowance will also be extended. In April 2019, the National minimum wage will increase from £7.83/hr to £8.21/hr.
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