Brexit Budget

Brexit Budget

Business leaders welcomed a shot in the arm for the British economy last night after Philip Hammond unveiled a pro-enterprise Budget.
In the final Budget before Brexit, Philip Hammond announced a raft of fresh tax reliefs and spending pledges to help boost the UK’s ongoing productivity issues.

A Budget for Business

Business leaders welcomed a shot in the arm for the British economy last night after Philip Hammond unveiled a pro-enterprise Budget.

In the final Budget before Brexit, Philip Hammond announced a raft of fresh tax reliefs and spending pledges to help boost the UK’s ongoing productivity issues.

Among the policies Hammond announced were:

  • an increase in the annual investment allowance (AIA) from £200,000 to £1m for two years, giving extra tax relief to firms that invest in machinery;
  • tax breaks to encourage businesses to invest more in factories, offices and other places of work;
  • £1.6 billion for R&D to promote science and tech innovation;
  • £50m for artificial intelligence fellowships;
  • a two-year freeze on the VAT threshold.

Entrepreneurs were directly targeted through an extension to the British Business Bank’s start-up loans programme, which will run until 2021, and amendments to a policy called Entrepreneurs’ Relief – which had been in line to be scrapped.

They pay a lower rate of tax at 10 per cent, compared with the standard rate of 20 per cent on capital gains when they sell off some or all of their business.

Hammond has now doubled the minimum qualifying period from 12 months to two years and shareholders will now have to hold a 5pc economic stake in the company to receive the relief.

The Chancellor also announced smaller-scale measures, such as £20m of skill-training pilot schemes.

In a Budget that was welcomed for supporting smaller and more risky start-up businesses, Hammond said he would help UK pension funds invest in such firms.

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