Business groups have welcomed many of the measures in the Autumn Budget, applauding what the chancellor didn’t do as well as what he did.
Mike Cherry, FSB national chairman, said: "This is the most small business-friendly budget that this chancellor has delivered. He has listened to our requests across many areas of tax and public policy, putting him firmly on the side of Britain’s small businesses.
"On the tax front, small firms up and down the country will be pleased to see the VAT threshold frozen for two years. FSB was credited in the speech for our campaign on this, stopping an over-reach which would have created a mountain of bureaucracy and a tax-hike for more than a million businesses."
Other key policies that were welcomed by the FSB included business rate reductions for small retailers and the protection of the employment allowance.
"The chancellor is now using the strength of the Treasury to back small business," Cherry added. "We have already seen a significant change of tone in recent months towards helping businesses, right from the top of government, and today represents the change of policy that backs this up."
Carolyn Fairbairn, CBI director-general, described Budget 2018 as "rock-solid … bringing more treats than tricks for business." In particular, she said Hammond had "come up trumps with a bumper package to spur firms to invest more into their factories and machinery, with the improved annual investment allowance and incentives for spending on buildings."
Adam Marshall, director general of the British Chambers of Commerce (BCC), said: "The chancellor has demonstrated that he is listening to business concerns by delivering a Budget that supports investment and growth … [he] responded directly to the BCC’s calls for bold incentives to turbo-charge business investment, for steps to support high street businesses struggling with business rates, and for measures that cut the cost of apprenticeships for SMEs. Philip Hammond has sent important and positive signals to businesses across the UK, many of whom have been wavering on investment and hiring. Crucially, [he] has avoided major increases to business tax."
Stephen Martin, director general of the Institute of Directors (IoD), said: "The chancellor showed he has listened to business leaders today with key reforms on business rates, the apprenticeship levy and the annual investment allowance. But for all of the individual positive measures, including money for infrastructure upgrades, this was a Budget that pulled its punches."
On the UK’s productivity challenge, Martin said the Budget "missed a few tricks, particularly in incentivising small businesses to adopt the technology they need to drive up their performance … the announcements were slim pickings given the substantive funding and focus we need to truly lift the UK’s long tail of underperforming firms."
The biggest concern among business groups is the move to roll out off-payroll tax rules into the private sector, changing the way that independent contractors are taxed. This reform has been delayed until April 2020, but the prospect of these changes continues to cause alarm.
Chris Bryce, ceo of freelancer body IPSE, said: "The chancellor has today forced the self-employed into a holding pattern of despair, as they await the introduction of controversial tax changes which could force them out of business from April 2020.
"This will have a chilling effect on entrepreneurialism in the UK: if you’re thinking about striking out on your own, as a white van man or a one-woman band, you’ll always be looking over your shoulder, wondering when the government will be coming after you.
"The rules … allow big businesses to push their national insurance obligations onto the self-employed, who end up being taxed like employees without any employment rights."
However, amendments to these reforms could well be made before 2020. Dave Chaplin, ceo and founder of ContractorCalculator, described the 2020 roll out as "premature until the full facts of the public sector impact have been established, which won’t be known until the middle of 2019. By then we expect to see evidence that the reforms have been damaging to the public sector, raised costs and effectively resulted in a net loss."