The economy is rarely out of the news and with pressure increasingly rising on the Government to deliver growth out of the flagging economic engine many small business owners were riveted to the budget announcement on Wednesday.
Despite the welcome new on reducing employer’s National Insurance costs by around £2,000 per employee (although this will not be introduced until April 2015) and the cancellation of the planned fuel duty rise, many small businesses would have been disappointed that more was not done to encourage more lending to small businesses which represent a significant element of the UK’s wealth creating sector, employing over 8 million people – those with fewer than 250 employees.
A summary of the key changes are detailed below:
1. Corporate tax rate to be lowered by 1% to 20% to match main personal tax rate, in April 2015.
- Small company and main rates of corporation tax to be merged at 20p.
- New Employment Allowance will take the first £2,000 off the employer National Insurance bill of every company.
- Bank levy rate to increase to 0.142% next year to off-set reductions in corporate tax.
2. Planned 3p rise in fuel duty for September scrapped
The key benefits for employees include:
- For 2014, no personal tax on first £10,000 of earnings.
- Tax free child care” worth £1,200 per child.
- More generous shareholder status, CGT relief for sales of business to workers, tax help to return to help after sickness and a doubling to £10,000 for tax free loans for commuters’ season tickets.
By Bruce Ramshaw
Principal Consultant
