(Last Updated On: 10th December 2013)

“The best way to help small business is by lowering the burden of tax” said George Osborne in the Autumn Statement.

 

I whole heartily agree. Here are the benefits businesses can expect:

George Osborne confirmed the Employment Allowance will come into effect from April, 2014. This will give employers £2,000 off their employers National Insurance bill for that year.

As a further break for employers, he offered from April, 2015 that employers will pay no employers national insurance for employees under the age of 21 who earn less than £42,285. Aiming to reduce youth unemployment by decreasing the cost to employers of employing under 21s.

Business rates have been capped and there has been an extension to April 2014 of business rate relief. In addition for retail premises with a rateable value less than £50,000 there is a £1,000 reduction in their business rates. Plus there’s a proposed new occupancy relief which will halve rates for new occupants of retail premises. Overall these business rate measures will help small retailers and hopefully the many small independent retailers that make Brighton the place it is.

 

The big changes in personal tax is the increase in the personal allowance to £10,000 for 2014-15. The additional £560 that can be earned by basic rate tax payers will save them £112 of income tax. Looks like the Lib Dems lost out on their call to increase the personal allowance to £10,500.

It’s important to note that going forward the rise in personal allowance will be by CPI (inflation) but the threshold at which you start to pay higher rate tax is only going to increase by 1%. So as the years roll by more people will be higher rate taxpayers. But they’ll be another election by then so that could change.

The other big change was to allow married couples and civil partnerships to transfer a £1,000 of their personal allowance to their partner. This could save couples £200 in income tax. But there maybe an impact on benefit entitlements which will need exploring.

There was one more change which could impact home owners who move out of their home before it’s sold. Previously there was a period of 36 months where you could have moved out of your home before it was sold but it was still deemed to be your principal private residence and hence the sale exempt from capital gains tax. This was to prevent homeowners whose house took a while to sell after they moved out being penalised. From April 2014 the period will reduce to 18 months which could catch people unaware with a nice capital gains tax bill on sale of their property.

 

Lastly do you remember the government telling us they’d be the greenest government ever? I think they’re hoping you’ll forget what they said as they announced further tax breaks for shale gas and a roll back of green levies.

A good day for small business, a sad day for the environment.

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