Local business owners were left with small change in the Chancellor’s big spending review today according to a local tax specialist.
David Underwood who runs TaxAssist Accountants in Harrogate said:
We wanted more recognition of the hard work and major contribution made by small businesses to the UK economy. You could say it’s a case of no news is good news for local business owners, but I think there has been a huge opportunity missed to reward those enterprises which are the backbone of our economy.
The combined Autumn Statement and Spending Review said little of real significance to small businesses. They are already facing huge challenges from new rules on pensions, dividends and the living wage, so will be grateful that there were no more bombshells, but there were no early Christmas presents either.
The Chancellor’s decision to abolish plans to cut tax credits is welcome. These are a vital contribution to household income for low earners and working families. The self employed do not benefit from the national minimum wage and reducing tax credits could have made many people think twice about remaining self employed.
The £2 billion a year boost for the housebuilding sector, particularly to build affordable homes, announced by the Chancellor is a welcome boost to local economies, with many small businesses such as plumbers, electricians and decorators as well as those in construction reaping the benefits.
But there was no sweetener on the new tax on dividends payments announced in the summer Budget. The change could cost basic rate owner-managers close to £2,000 a year.
Extending small business rate relief for another year will also be well received by local business owners, particularly independent retailers who already face the huge challenge of online shopping as well as the competition from major store chains. Devolving control of business rates to some major cities does not answer the need to fundamentally reform this outdated charge which is a huge burden to many local business owners.