George Osborne claimed today that “This is a budget for small businesses” as he announced that he was more than doubling small business rate relief permanently. The chancellor introduced a raft of measures directly affecting SME owners.
Here are the headline points:
- 600,000 small businesses will pay no rates and 250,000 will have their rates cut from April 2017 because of reforms to business rates
“Businesses with a property with a rateable value of £12,000 and below will receive 100 per cent relief. Businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief,” the Budget statement says.
- Corporation tax is down to 17% by April 2020. It will be 19% next year down from 20%
“This is a tax system which says to the rest of the world, we’re open for business,” he said. But he also brought in restrictions barring all such carried forward losses to 50% of profits and halving the amount that banks can use to just 25% of their profits.
- New actions to tackle overseas retailers who store goods in Britain and sell them online without paying VAT
What he termed “the great unfairness” they face with large online multi nationals such as Amazon and eBay.
- New tax-free allowances for “micro-entrepreneurs” who rent their homes or sell services through the internet
They will benefit from two new tax-free allowances each worth £1,000 a year.
- Insurance premium tax increase by 0.5% to 10%
Association of British Insurers (ABI) says added nearly £13 to the average comprehensive motor insurance policy, at its current level.
- Fuel duty will be frozen for the sixth consecutive year, saving £75 for the average driver
Motorists will also pay a 20 per cent VAT on those fuels. Currently, the average price per litre is 102.72p with 58.9p per litre made up of duty.
- There will be a commercial stamp duty of zero on properties up to £150,000, 2% up to £250,000 but a top rate of 5% above £250,000
These reforms will raise £500 million a year but, 9 per cent will pay more. Over 90 per cent are expected to see their tax bills cut or stay the same.
- Affecting landlords both lower and higher rates of Capital Gains Tax were cut – to 10% and 20% respectively. But CGT on property will be subject to an eight percentage point surcharge
- The government has set out a £1 billion package to support SMEs through the British Business Bank
It will support the first loans under its Help to Grow programme from spring 2016, supporting, at least, £200 million of lending. The Enterprise Finance Guarantee programme, which supports firms that lack a sufficient track record or collateral to access the finance that they need, will be extended until at least 2018.
- Steps that aim to cut UK Export Finance (UKEF) transaction times in half are being trialled. If successful, they will be rolled out across trade finance providers supported by UKEF
- A new High Speed 3 (HS3) rail link between Manchester and Leeds and the creation of a new four-lane M62 motorway, part of which runs between the two cities got the go-ahead
- And of course, affecting small businesses as well as consumers, there was the sugar tax on fizzy drinks which will be introduced from 2018