Last year Chancellor George Osborne vowed that the government would ‘back small businesses all the way’ but one year on what does the new Budget mean for businesses run by people like you or me?
Here I take a look at how the Budget 2014 will directly affect UK businesses and what benefits have been unlocked as a result this April besides the cut in Bingo Tax and pint prices!
Great news for SMEs looking for investment
For small to medium sized enterprises in particular, recent changes will be a cause for celebration as the Chancellor announces a host of positive outcomes for the ‘makers, doers and savers’.
In the search for a more sustainable recovery, the Budget 2014 will aim to encourage investment in businesses thanks to the 50% rise in investment allowances. This allowance has doubled to £500,000, ensuring that ventures looking for start-up or follow-on funding to support growth become one step closer to achieving this financial assistance from private investors. The boost will also allow businesses of all sizes to obtain the investment tax reliefs that have become an essential part of investing and supporting business growth.
Slashing your corporation tax bill
Under the new Budget, businesses will see their corporation tax bill cut from 23% to 21%. Corporation tax has been falling steadily since 2010 and the change, which came into effect at the beginning of the month, will be a welcome break for businesses looking to reduce their annual tax bill further.
Say goodbye to the burden of business rates
Business rates have always been a hot topic, especially for small and start-up businesses that have found these high rates have a damaging effect on both their prospects and profit margins.
The Budget 2014 saw business rates capped at 2%, whilst business rates reliefs for small businesses are now available until April 2015. As a result over half a million small businesses will receive a discount on their business rates with a further 33% not paying any rates at all.
Boost your company’s workforce thanks to reduced NICs
Available to the majority of UK companies, the Employment Allowance will see business owners from all sectors pay reduced employer Class 1 National Insurance contributions (NICs). This reduction will slash the average business’ annual tax bill by up to £2,000.
The Employment Allowance is great news for smaller local businesses that put off the unavoidable cost and paperwork that goes hand-in-hand with employing new staff. The changes will enable these businesses in particular to hire the staff they need to take their company to the very next level.
About the Author
Tony Earnshaw is the founder and director of UK Commercial Cleaning. The organisation has grown from strength-to-strength since it was established in 2007 and with a little help from Dragon Duncan Bannatyne, UKCC is now the country’s foremost commercial cleaning firm.