“This is a Budget for those who aspire to own their own home; who aspire to get their first job; or start their own business”.
Promising words, but what will be the impact on small business?
The biggest stimulant for growth for business is the reduction of the headline rate of Corporation Tax (CT) to 20% for all businesses. Unfortunately this is only a direct benefit to those with profits over £300,000. The only way this will benefit small business is if those Companies that receive the benefit invest the extra cash in small business.
The government will invest an extra £3bn a year from 2015-16 in infrastructure. One beneficiary will be broadband internet, which will benefit many small businesses.
There’s a capital gains tax relief if a business is sold to its employees, which may prove very attractive to owner/managed businesses that are looking to sell.
The government is going to increase the value of procurement budgets spent through the Small Business Research Initiative. This initiative, engages companies in competitions for ideas that result in government development contracts.
£30m is going to be made available over two years in the form of growth vouchers to enable small businesses to obtain external advice to help them expand.
There will now be £42m available in 2013-14 and £60m in 2014-15 to 18-30 year old entrepreneurs in start up loans.
The Business Bank whose aim it is to improve access to capital for small business is being launched shortly, with new details being published in the next few days.
The Help to Buy Scheme for all buyers of newly built homes, which will see home owners put down a 5% deposit and the government loan you 20% for the rest of the deposit, should provide a boost to the Construction industry.
The schemes above may help the average small business, but the only measure to put cash back in small businesses pockets and reduce the burden of taking on employees, is the Employment Allowance. From April 2014, every business will get up to £2,000 off their Employers NIC bill.
Overall – does this budget really help small businesses? Is it fair that big business pays the same rate of Corporation Tax as small business? Wouldn’t we have loved a reduction in the small rate of CT.
Although the Chancellor has called them on more than one occasion the lifeblood of the economy, other than the £2000 Employment Allowance, there is no direct help for small businesses.
A Green Budget?
Mr Osborne stated: “Creating a low carbon economy should be done in a way that creates jobs rather than costing them.”
I completely agree.
But then he went on to say that the granting of planning permis-sion for nuclear was a major step forward. And to make matters worse he introduced a ‘generous new tax regime’ for shale gas. Shale gas and fracking is highly controversial, with large organi-sations campaigning against the use of fracking in the UK, read more about The Co-operative’s campaign.
There is further decommissioning relief for the North Sea to en-courage extraction of every last drop.
On the plus side, there will be further support for manufacture of ultra-low emission vehicles, and support for 2 major carbon capture and storage projects.
I feel saddened that clean energy wasn’t even mentioned, and am very concerned of the potential for fracking to be a reality right here in Sussex. The Argus back in December, highlighted there are 15 licenses to drill in Sussex already.
This is not a green Budget.
“We’re taking a penny off a pint”
The biggest cheer in the House of Commons during the Budget was when George Osborne scrapped the 3p rise in beer duty and went one step further and cut beer duty by 1p.
It’s concerning when cut in beer duty is the budget highlight.
I tweeted ‘sounds like handbags at dawn’ and got back ‘I thought I had tuned into the Archers, sounds like a farmyard!’.
Behind the cheering and jeering, there were some useful policies which will hopefully put more money in our pockets.
The personal allowance will go up to £10,000 from 6 April 2014, a year earlier than expected. For those self-employed businesses, this will mean paying less Income Tax. Unfortunately, the National Insurance thresholds aren’t increasing at the same pace.
If you’re a car driver you’ll be pleased the expected fuel duty increases have been scrapped.
If you pay for childcare, then the Childcare vouchers worth up to £1,200 from autumn 2015 per child will be popular. Parents will operate an online voucher account, where for each 80p they put in the government will add 20p. Vouchers are used to pay for Ofsted registered childcare. Available to families who both earn up to £150k. More detail will come on the exact operation of the scheme.
But if all this doesn’t relieve the gloom then head down to the pub and save yourself that penny.