entire budget so that you don't have to. And I'm sorry, but what an absolute joke of a political system we've got in this country. It's like a bunch of school children arguing in the playground. It's just frankly embarrassing. What an absolute disgrace. Anyway, I watched it all and I've even skimread the budget document so that you don't have to do that either. There's kind of good news and bad news from a small business perspective. I'm going to start with the good news. There was various rumors about the VAT rates being changed and the VAT thresholds being changed and all that sort of thing. That all turned out to be bollocks. I don't know how these things get leaked or why the media come out with stuff that's just basically entirely made up. But don't worry folks, the VAT threshold isn't dropping to 30 grand, or at least not yet. But that genuinely would be catastrophic for almost every small business in the UK. Now, usual rules apply here. I'm not an accountant. I'm just kind of explaining it from a small business owner's perspective. As I say on this channel, from my point of view, I'm trying to teach you the sort of stuff that I feel you should have been taught at school. And one of those things is kind of understanding the budget. I mean, it doesn't particularly help the way that the budget is delivered. As I say, what an absolute joke of a system, but to be honest, the really useful information [snorts] is in the budget document if you actually download it off the government website. Now the first thing that I have done is I've uploaded it into AI and I've got Grock to do the hard work for us and it gave me a very quick kind of summary and rundown from a small business perspective but most of it was more kind of I felt aimed more at medium-siz businesses. There's very little that's going to impact you as kind of a micro business, small business type of thing, but there are a couple of sneaky little things and um yeah, it's interesting. Okay, credit where credit's due to Rachel Reeves. She hasn't increased income tax or VAT or whatever else she promised not to increase, but she's kind of being a little bit sneaky. And the way that she's got around putting some tax rises in is to basically rename them to something else. So, there are three tax rises in there that will probably impact you in one way or another. One is a new tax on landlords, savings, and one is a new tax on dividends. Well, kind of. Basically, the way that the budget document is written is that whereas before your savings would just get taxed as part of your income tax. So, your income tax rates 20%, your savings tax rate would be 20%. Well, effectively what they're doing is bringing in a savings like a new savings tax rate which is 22%. So yeah, your income tax hasn't raised but the tax on your savings has gone up and they've managed to do that without touching the income tax rate by putting savings into a tax of its own. Same applies for uh landlord tax if you're a soul trader as well. I think now I haven't seen the nitty-gritty of exactly how that's going to work yet, but basically it looks like your landlord income is going to go from a base rate of 20% to 22%. Anyway, the other kind of major thing is your dividend tax increase. And it looks like from April 2026, that's going to increase by 2% from 8. 75% to 10. 75%. Which really, we're kind of getting into the territory now of uh for a lot of people, it's not going to be worth being incorporated as a limited company anymore because the trade-offs aren't really going to be worth it. But having said that, if you stay as a soul trader, you're going to be lumbered with mating tax digital and all of the admin overheads that go with that. So, you know, pick your poison. We've also got plenty little kind of stealth taxes hidden away in there, such as the personal allowances being frozen until 2031 now. So, no inflationary increase on personal allowances. I can't remember when the personal allowance last increased, but that is fiscal drag. It is a stealth tax because basically inflation is constantly going up and as a result wages are going up so you're being pushed into higher and higher tax bands but your personal allowances aren't changing. Not really small business related but quite an interesting one. We did predict that the ISER rates were going to change and things like that and sure enough they have. So, we used to have a cash iser annual allowance of 20 grand a year. That's now dropping to 12 grand a year, but the remaining 8 grand you can put into an investment allowance. But, uh, yeah, I'll leave Martin Lewis to talk about all that side of things cuz I am no expert on personal finances. Living wage for over 21s is going to increase from £121 an hour to £12. 71 an hour. We're going to have a 2 grand cap on salary sacrifice pension contributions. the ins and outs of that. I haven't fully got my head around yet. Electric vehicles are getting taxed more and more, so kind of glad I've got rid of mine. They're now bringing in a pay per mile tax, which basically means if you do 10,000 mi a year, you're going to have to pay an extra £300. And uh yeah, that is kind of uncapped by what I understand. 3 per mile. I'm expecting absolutely immaculate roads because of all the extra money they'll get from that. Various new council tax charges. Again, not small business related, but to be honest, I don't think that's a bad thing. The council tax rates and bans have been out of kilter for so long now, and it's only really affecting people with very, very high value homes. So, yeah, that actually I think is quite a good thing. And while I'm talking about non-s small business things, I think it's very sensible that they've got rid of the two child benefit cap since we're facing demographic collapse at the minute. Back on topic with small business related things. I had a full search through the budget document in relation to making tax digital and uh you will know my views on that very well by now. And no, unfortunately there's nothing in the budget saying they're abandoning their plans for MTD for income tax from April next year. If anything, they're doubling down on it. So, uh yeah, good luck with that one. Loads more about that in future videos, by the way. So, do hit subscribe. Now that this budget's out the road, I kind of know what kind of playing field we're on. Class 2 small profits threshold will increase from 6,845 per year to £7,15 a year. And the class 2 amount payable will increase from £350 per week to £365 per week. I have to give Rachel credit and there are a few things that are beneficial for retail, well high street businesses basically. reduce business rates for hospitality, leisure, and things like that. But another hidden little sneaky tax increase that I thought was quite an interesting one, and no one seems to be talking about it very much, is the changing of the writing down allowances from 18% to 14%. Now, as I'm not an accountant, I'm not going to try and explain that. There's some really good accountancy channels on YouTube. You know, go and have a look at Healing Associates and Accountancy. she she'll probably explain it much better than I can. But that is a stealth tax increase because it means from year to year, especially like as a limited company or whatever, you can't offset as much against depreciation. But uh yeah, it's a little bit complex how that would work. So I'll leave it for the accountants. No changes that I could see on the corporation tax side of things for small businesses. But then we'll get into a few other kind of hidden things that you'll only know about if you download the main budget document. I'll include a link to it in the description if you want to have a look for yourself. It's very boring. And no, I didn't print out the entire thing. That's only page one and the rest's just a bunch of kind of scrap paper. But uh yeah, how about this one? Making better use of third-party data. The government will acquire third party data more frequently for interest income and card sales from April 2028. So I'm assuming that's going to mean that any kind of income that you get from interest and card sales that it will report into HMRC more easily. I know a certain amount of that already automatically goes to HMRC. For example, information from eBay and Etsy and Amazon already kind of filters down to HMRC automatically whether you like it or not depending on how much you're earning. But I presume they're broadening that to include a much wider scope of card sales in general. I don't know. I'm kind of guessing here, but I would assume what they mean by that is if you take card transactions at all, whether it's like in person or over the phone or whatever, that that's potentially going to automatically feed back to HMRC. I don't know. That's what I'm guessing. We've then got another one, e invoicing. The government will require all VAT invoices to be issued in a specific electronic format from April 2029. You heard it here first, folks. The government will work with stakeholders to develop an implementation roadmap to be published in the next budget or budget 2026. So, uh, yeah, that's a little bit on the sinister side. I'm not entirely sure what they mean by either einvoicing. I mean, you could technically generate an invoice in Excel and it's electronic. I think they are going to push down the route of making you issue all of your invoices via some sort of app that you'll have to pay a subscription for. So, great more timely payment of self assessment. The government will require income tax self- assessment payers with payers who earn income to pay more of their self- assessment liabilities in year via PA from April 2029. This is huge and yeah I mean it doesn't kick in for a few years yet but that potentially means forget about your payment on account and all that sort of thing if you have already got PAE. So, in other words, you're doing like self-employment as like a side hustle or something like that. That to me suggests that even if you don't have any kind of payroll set up that they're going to try and take your self- assessment payments via pay as you earn, presumably via your main employer somehow. I'm not entirely sure, but uh yeah, that's slightly terrifying, but you've got until April 2029 to get out. I guess the government will publish a consultation in early 2026 on delivering this change and on timelier tax payment for those with only self- assessment income. Timelyier tax payments for those with only self-assessment income. H now let me just think what's rolling out from April 2026 next year making tax digital with quarterly submissions of your turnover and expenses and basically your profits. Now, everything I've read has kind of assured us as small business owners that we're not going to be paying tax quarterly. We're still our self assessment yearly or every 6 months if you're doing payments on account. But does this possibly suggest that in a few years time that they're going to start to collect the income tax self- assessment tax revenues pretty much in the same way that they collect their VAT revenues at the moment. In other words, every quarter. I would absolutely guarantee within 5 years that will be coming in and making tax digital from next year will be the start of it whether you like it or not. And finally, just the icing on the cake just to cheer all of you small business owners up a little bit more. Uh the last thing that I can find that will probably affect you at some point, VAT and PA timely payments. The government will publish a consultation in early 2026 considering ways VAT and pay as you earn liabilities can be paid promptly without the taxpayer falling behind on their payments, including more tax payments by direct debit. Oh my word. If that doesn't terrify you, then it should. I suspect that will mean that if you're late doing your VAT bill or you're late submitting your pay as you earn information for the month, they will just automatically take out a direct debit of whatever the previous months was or something like that. Again, I don't know how that's going to work. Very interesting though. And you know, you heard it here first. It'll take a little while for them to get their head around how that's going to work. But trust me, if it makes more money for the government, then they will bring it in eventually. So, there you go, folks. Let us know in the comments what you think about it. Have you gone through the budget with a fine tooth comb? And have you worked out how it's going to impact your business potentially from like today, probably realistically from April next year. On the whole, you know, I don't envy Rachel's job. I can't think of anything worse than being stuck in that building arguing with a bunch of school children like that. I would absolutely not be able to keep my cool in that kind of situation. I would be kicked out of there within 5 minutes. But yeah, as I say, the more interesting stuff is when you start kind of reading between the lines and finding the stuff that isn't really getting talked about in the media because it's not as exciting. But actually, in a few years time, it's going to have a big impact on your business. Anyway folks, as per usual, good luck on your small business journey. Do hit subscribe if you're new to the channel and we shall see you next time. Ty. Bye.
