17th March 2016
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.
· 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?
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Source; http://www.startups.co.uk Published; 17.03.16