Budget 2016: noteworthy measures for businesses

News

17th March 2016

George Osborne has delivered his eighth budget and there was plenty in it for businesses large and small to digest so here’s a round up of noteworthy measures we feel you should know about. 

  • Corporation Tax

A move widely welcomed across the UK is the cut to corporation tax, a deeper cut that expected which will see it fall to 17% by April 2020. A significant reduction from the 28% at which it stood at when the Conservatives came to power. The chancellor believes that this move will help to "put rocket boosters on the backs of enterprise and productive investment".

  • Business Rates

Business rate relief for small companies was permanently increased, from £6,000 to £15,000, and the higher rate from £18,000 to £51,000. This meant, the chancellor said, that from April next year, 600,000 more small businesses would pay no rates.

Mike Cherry, policy director at the Federation of Small Businesses, also spoke in favour of the Budget. He said: “In a Budget constrained by the need to reduce the deficit and the economic outlook, the Chancellor has listened to our calls for the tax system to be made simpler for small businesses and the self-employed.”

  • Micro-Entrepreneurs

Becoming a “micro-entrepreneur” has proven to be a popular past time for many individual who want to create an income from renting out their rooms, or trading online. The budget gave a small victory for these individuals as they will now receive a £1,000 tax-free allowance, while the self-employed will, from 2018, no longer have to pay Class 2 national insurance contributions. The chancellor said that “at least 500,000 people would benefit and there would be no tax return forms to fill in”.

  • Pensions

With very little consideration on pensions in the budget it hasn’t eased the concern of high earners and has left many unsure about what comes next.

Instead, he unveiled a retirement savings vehicle for millenials, badged the Lifetime Isa. He said the tax-free Isa savings limit would be raised to £20,000 a year from just over £15,000 and added that people under 40, “many of whom haven’t had a good deal from the pensions system”, would gain government bonuses for saving into their Lisas, receiving £1 from the government for every £4 saved, at a maximum of £4,000 a year.
 

  • Stamp Duty Cuts

About 90% of small businesses will benefit from lower stamp duty on commercial property. He said rates of stamp duty land tax for commercial property will fall in the lower bands, with a zero rate for properties valued at to £150,000. The changes apply from midnight Wednesday.


If you have concerns about the budget and how it may affect you or your business please don’t hesitate to contact us so we can assist you where possible. 

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