It was always going to be a difficult budget for Chancellor, George Osborne.
To a large extent his hands were tied by the continuing recession, overseas events and a rigid policy which focuses solely on austerity rather than any real growth agenda. So he had, in many ways, little room for manoeuvre. Never the less, many will have been disappointed by his latest budget, particularly small businesses, as it did little to encourage growth and investment.
Despite welcome news on cutting employer’s National Insurance costs and scrapping the planned fuel duty rises, there was little other cheer for small business. Access to funding and the high level of business rates have been major concerns for small businesses, yet the budget fail to address either of these issues, or extend small business rate relief which is due to come to an end at the end of this month.
So, it you own a small business what did the budget do for you?
Highlights of the 2013 Budget:
- From April 2014, all businesses and charities will be entitled to an Employment Allowance of £2,000 per year towards their employer National Insurance contributions (NICs) bill. This will particularly help small businesses who want to hire their first employee or expand their workforce.
- An increase in fuel duty of 1.89 pence per litre, originally planned for 1st September 2013, will be cancelled. This is great news for trades people and service providers who make home visits and are dependent on their vehicles.
- The government had already pledged to increase the personal allowance to £10,000 by 2015/16, but today announced that this would be brought-forward a year and will now increase to £10,000 in 2014/15
Disappointments of the 2013 Budget:
- Despite fervent lobbying by business groups, business rates remain set to increase this year by an estimated 2.6%
- By April 2015, the main rate of corporation tax paid by companies with profits in excess of £300,000 will be just 20%. Unfortunately, there was no comparable cut in the small profits rate which is payable by companies with profits under £300,000- which remains at 20% for the foreseeable future