There was no change to level of Entrepreneurs’ Relief which allows business owners saving on capital gains tax ie, a 10% tax on all gains on qualifying assets, but the ownership period to qualify for the relief has doubled to two years, the Chancellor argued to better target relief that is worth up to £1m to business owners.

The Annual Investment Allowance (AIA), is a form of tax relief for British businesses that is designated for the purchase of business equipment. The AIA allows a business to deduct the total amount of qualifying capital expenditure up to a certain limit from its taxable profits in a given tax year. The allowance is rising from £200,000 to £1m for two years.

Jay Boyce, partner at accountants MHA MacIntyre Hudson, said: “The increase in the annual investment allowance (AIA) is excellent news for SMEs and will encourage investment in new plant and machinery. However, as the increase doesn’t take effect until 1 January 2019, companies may want to defer expenditure until after this date if they’re spending in excess of £250,000.

“We’ve yet to see the detail on the reform of entrepreneurs’ relief, but one likely outcome is an acceleration of business disposals in the coming months, particularly for those businesses that have incentivised senior staff with enterprise management incentive (EMI) options on the basis that the qualifying period is only twelve months.

Bigger digital businesses may not be so happy as the Chancellor announced that he is to introduce a UK Digital Services Tax. Mr Hammond stressed that this was not an online sales tax on goods bought online and will only be paid by profitable firms that have at least £500m a year in global revenues. The tax will come into effect in April 2020 before which there will be a consultation. The move is predicted to raise more than £400m each year.

“The digital services tax of 2% is another laudable step, but it may have been a better idea to restrict the use of brought forward losses instead,” said Boyce, “Many of the technology companies Philip Hammond is targeting have significant tax allowable losses and by restricting their use he could increase tax payable in the UK.”