How will the budget affect Small & Medium businesses…?
George Osborne, the Chancellor, announced that the rate of corporation tax would fall to 19pc in 2017 and 18pc in 2020, the lowest in the G20. How will this affact small & medium businesses? For start-ups and many UK small firms, which only generate a marginal profit, this is unlikely to have a big impact.
The National Living Wage was the “rabbit in the hat” moment of the address. As of April 2016, the Government is introducing a new minimum wage of £7.20, which will rise to £9 by 2020.
Small firms or businesses employing a significant number of staff on the minimum wage are likely to feel this change most keenly, although there are some new measures from the Government to reduce the impact on the most vulnerable businesses.for by the employees, rather than just increase the Employment Allowance from £2,000 to £3,000 a year.”
small & medium businesses & Start-ups
- Small business rate relief will be doubled for a further year to March 2016
- New National Plan to bring ultra-fast broadband to almost all UK homes
- Up to £600m to clear new spectrum bands to improve mobile networks
- Investment in science and innovation, including £140 million in world-class research on the infrastructure and cities of the future, and £40 million in research into the ‘Internet of Things’
- Enhancement of R&D relief for SMEs increased to 230% – already announced in the Autumn Statement
- Funding to support exporting to China increased – £15m in 2015-16
- From April, Corporation Tax for businesses making profit in excess of £300,000 will reduce to 20%
- Annual bank levy to rise to 0.21%, raising an extra £900m
- Personal tax-free allowance is set to rise from £10,600 in 2015-16 to £10,800 2016-17 and then to £11,000 in 2017-18- cutting for 27 million people
- Higher tax rate threshold will rise from £42,385 this year to £43,300 by 2017-18
- New criminal penalties for tax evasion (including advisers)
- Annual Paper tax returns to be scrapped completely
- Death of the tax return – Annual self-assessment return to be replaced by individual tax accounts
- Transferable tax allowance for married couples at 10% of personal allowance to be £1,100 by 2017
- To support five million people who are self-employed, Class 2 National Insurance Contributions to be abolished entirely from next year, and Class 4 contributions are to include a new benefit test
- National Insurance Contributions (NIC) to be abolished for employing under 21s
- Accountants and tax advisers working with contractors will be subject to new anti-avoidance legislation
- Clampdown on Umbrella companies using travel & expenses to increase contractor take home pay to be detailed in the small print