17th March 2016
Below are
the key small business policies that were announced and what they mean for your
business. Do you think they deliver for UK businesses and entrepreneurs?
New tax-free allowances for the sharing economy
In a surprise announcement from the chancellor, the government will be introducing two new tax-free £1,000 allowances that will come into effect from April 2017.
One allowance will be
for selling goods or providing services and the other will be for income on any
property you own. Therefore for part-time business owners that make up to
£1,000 from occasional jobs such as providing a lift share or selling goods you
have made, you will no longer need to pay tax on that income.
Small business rate
relief will double from £6,000 to £12,000 from April 2017. Small businesses
that occupy property with a rateable value of £12,000 or less will pay no
business rates and there will be tapered rate relief on properties worth up to
£15,000. Osborne said this will effectively mean that 600,000 businesses will
pay no rates.
Osborne has announced
that Corporation Tax will fall to 17% (from the current 20%) by April
2020. The chancellor also confirmed that Capital Gains Tax at the higher rate
will drop from 28% to 20% from April 2016 with the basic rate dropping from 18%
to 10%.
From April 2018, Class
2 National Insurance Contributions (NICs) for self-employed people will be
scrapped so if you’re self-employed you will only need to pay one type of
National Insurance (Class 4 NICs) if you make a profit of £5,965 or over per
annum.
The government will invest £60m for the High Speed Rail 3; this will benefit businesses in the North by cutting journey times to around 30 minutes between Leeds and Manchester. £80m will also be invested in Crossrail 2 to connect South West and North-East London.
Targeted at large companies and set to benefit small companies, the government plans to raise almost £8bn from large firms and multinationals through changes to rules on interest and other measures, including:
·
Introducing
rules to prevent multinational companies that avoid paying tax in any of the
countries they do business in
·
Taxing
outbound royalty payments better meaning multinationals pay more tax in the UK
· Making sure offshore property developers are taxed on their UK profits
Osborne said this £8bn
will be reinvested in helping the small businesses that “pay their fair share”.
Entrepreneurs’ Relief
will be extended specifically to encourage investors to back unlisted companies;
the chancellor has added an additional £10m of relief on top of the existing
limit.
Focused on making the
‘Northern Powerhouse’ a reality, government will devolve powers to local
mayors.
The government will cut
the tax for many small businesses purchasing property by reforming Stamp Duty
Land Tax on non-residential property transactions (office spaces and the like).
Fuel Duty will be
frozen for a sixth year in a row.
A measure that will impact drinks businesses, there will be a levy that companies will have to pay on drinks with added sugar from April 2018. The money raised from the levy will be used to double the sports premium for schools to £320m a year.
Do you think the 2016 budget is good news for businesses and entrepreneurs in the UK?
Drop us an email at Services@JVPGroup.co.uk or give us a call on 0844 967 4467.
Source; http://www.startups.co.uk
Published; 17.03.16