Budget Breakdown – NFRN response

The NFRN has responded positively to the announcement of help for small businesses affected by the recent business rate revaluations, but is cautious to the application formula being drafted by the Secretary of State for Local Government and Communities.

Business Rates
The Chancellor responded to much-anticipated calls for business rate reform following the 2017 rate revaluations by introducing a £300m fund for local authorities to allocate ‘discretionary relief’ for the hardest hit cases in their area. Businesses coming out of the small business rate relief after the revaluation will have the increase in their bills capped at £50 per month.

Following calls from the NFRN and other trade bodies, the Government will launch a consultation on taxing the digital part of the economy as opposed to the traditional bricks and mortar economy.

Making Tax Digital
The Government has listened to the NFRN’s call to delay the implementation of quarterly tax returns for small businesses; those with a turnover below the VAT threshold will have an extra year to prepare and consult on making tax digital.

National Insurance
Businesses with a Class 4 National Insurance (if you are self-employed with profits of £8,060 or more a year) will see a 1% increase in National Insurance contributions from April 2019 with a further 1% increase in April 2019 to raise £145m a year for public services. This will mean 1.6 million of the self-employed will be paying £240 on average more every year.

Soft Drinks Levy
The Chancellor predicts less revenue than previously forecast resulting from the Soft Drinks Levy but believe it will still raise £1bn. The levy will be imposed at 18p and 24p for the main and higher brands.

There will be a new excise duty on cigarettes, which will increase the price of low-cost tobacco to a minimum of £7.35.

The NFRN opposed the introduction of a Minimum Excise Tax on cigarettes and anticipates it will contribute to the growing illicit tobacco market. The cost of this excise tax will hit the poorest consumers who will be driven away from retailers in favour of more affordable illicit tobacco. The NFRN will continue to voice retailers concerns of the illicit tobacco market as well as continuing discussions with the police and the Home Office calling for more action to be taken to eliminate illicit tobacco.

Chief executive Paul Baxter said: “We were pleased that the Chancellor heeded the NFRN’s calls and has delayed the introduction of quarterly tax returns for businesses below the VAT threshold until 2019.  We were concerned about the addition burden this proposal would put on small businesses and Philip Hammond’s announcement will give them more time to prepare.

“Equally welcome is the news that businesses that come out of small business rate relief as a result of the recent revaluation exercise will have to pay no more than £50 per month. However, we would have liked to have seen the Chancellor go further with regards to reforming business rates, in particular to review the current turnover based model for calculating business rates for forecourts and ATMs.”

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