2nd November 2018
The Autumn 2018 Budget was introduced as a ‘Budget for Britain’s future’; one that ‘shows the perseverance of the British people finally paying off and a Budget for ‘hard working families who live their lives far from this place.’ Looking through the headline announcements there were certainly some positives in the figures both for individuals and businesses and our Autumn Budget Newsletter summarises some of the key measures.
Many of the broad brush announcements will impact people and businesses equally across the UK. Nevertheless some of these will prove particularly beneficial for us in the South West of the country. For example, the Business Rates relief which is designed to help small retailers with a Rateable Value of less that £51,000 will particularly benefit tourist areas in Devon and the South West where the majority of shops and food outlets are local independent businesses. The continuation of partial rate relief for local newspapers is also good for our region, enabling our local press to continue to promote the benefits of the South West.
On the other side of the coin we’ll also keep an eye on the proposed Government consultation on the criteria by which self-catering and holiday let properties are judged to be subject to domestic or business rates. Business rates are currently adjudged to kick in at 140 days letting per year so the review is only likely to impact on occasional lets rather than year-round holiday businesses.
But our region isn’t just about tourism, benefitting from a range of business sectors including a strong tech development sector. We have seen first-hand the fantastic benefits that claiming R&D tax credits can deliver to these businesses. It is therefore worth noting that from 1 April 2020 the amount of payable R&D tax credit that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year. This measure recognises that this valuable relief must reach genuinely innovative companies.
Focusing on our region, are there any measures which specifically apply to the South West? Well, let’s start with infrastructure announcements. Roads, and drivers, throughout the region are likely to benefit from the pothole fund; but the announcement on the National Roads fund which is expected to amount to £28.8billion between 2020 and 2025 will also benefit major infrastructure projects, with the North Devon Link road being specifically mentioned.
An additional £23m transforming cities fund allocation has also been earmarked for supporting transport projects in the West of England Combined Authority. Plymouth too may benefit from this fund, being shortlisted for a share of the £440m increase to the overall fund.
Dawlish also comes in for a mention with the announcement that work will begin in November to strengthen the cliffs and protect the sea wall; with plans for a major improvement to the sea wall due to be published in summer 2019.
Digital infrastructure measures will also benefit our region. There is to be a £200m fund to pilot innovative approaches to deploying full fibre internet in rural locations. Cornwall is just one of three areas listed as being the first to benefit from this initiative. Other South West sectors which the government have singled out as specifically benefitting from the budget include the fishing industry which overall is to benefit from an innovation injection of £10m and our cider producers who may benefit from the freeze in duty.
And finally, there is one measure in the Budget which may not have come about were it not for representations made by two Cornwall MPs, (Scott Mann, the MP for North Cornwall and Steve Double, the MP for St Austell and Newquay). Thanks to their input the Chancellor announced mandatory business rates relief for public lavatories whether publically or privately owned.
Exmouth Partner Paul Carnell commented “one of the major announcements made was providing business rates relief of up to one third for the next two years for retail businesses with a rateable value of less than £51,000. This will be welcome news for many of our small independent traders that are competing against internet shopping, large supermarkets and out-of-town retail parks”.
He went on to say “as always we are working closely with all our clients so that they are fully aware of any of the Budget announcements that may have implications on them individually, their business or the sector they operate in.”
If you would like to find out more about the Budget announcements or meet to discuss the services which we are able to provide, please contact Paul Carnell, one of our other Partners or our tax advisers in Exmouth and Exeter on 01392 258553 or 01395 279521 to arrange a free initial meeting.