Budget 2014: small business winners and losers
George Osborne’s 2014 Budget was announced, bringing with it tax changes, legislative tweaks, gains for some and losses for others. With little spare cash to play with, what did the Government announce for the UK’s entrepreneurs?
Personal Tax changes
UK workers can currently earn £9,440 before they start paying income tax. A rise to £10,000 was already planned for April 2014 and on Wednesday Osborne said this would rise to £10,500 in April 2015. This means £800 a year more for the average taxpayer and also means that three million workers won’t have to pay any income tax at all.
The amount of money you earn before paying the higher 40% income tax rate is going up from £41,450 to £41,865 in April 2014, then up to £42,285 in April 2015. Employer National Insurance contributions for under-21s were also scrapped – this is relevant if you employ young workers.
Support for savers
If you have ISAs (Individual Savings Accounts) you’ll know there are currently two types: Cash and Stock. These will be merged into one product, making things simpler, and you’ll be able to save £15,000 tax free from July.
The 10% tax rate on savings has also been scrapped, as well as many of the rules on accessing your pension savings.
Business investment boost
To encourage new investors to back social enterprises, the government has introduced 30% income tax relief for social investment. Eligible social enterprises will be able to receive maximum investment of £290,000 over a three year period.
Also, start-ups are being encouraged to invest in innovative ideas in risky markets, with Research & Development tax credits available for loss-making SMEs increased from 11% to 14.5%.
Finally, the 50% relief on capital gains tax for VC re investors has been made permanent, which will help to continue investment support for small businesses.
Simplification of Class 2 NIC
A small but welcome change for the self-employed. Class 2 National Insurance contributions, which are currently paid weekly by Direct Debit, will be collected via Self-Assessment.
Good news for business owners
There was a reform of Air Passenger Duty, which will reduce the cost of international travel. Extra support was also announced for UKTI – the body which helps UK firms do business abroad – and the lending available to exporters doubled.
A £200 million pot was announced for local councils to help repair infrastructure damaged by recent floods. There will also be support for 200,000 new homes at designated sites across the country, potentially creating thousands of new jobs.
Win or lose?
The budget was fairly average for start-ups and entrepreneurs – not bad, but not great.
The encouragement of business investment was the most positive news and this should help out a lot of firms, especially in the manufacturing sector. Personal tax cuts will also help to keep a bit more cash in your pockets. Finally, there was some excellent support for specific industries, but obviously this is only good news for a limited number.
103 Cranbrook Road,
Very quick and efficient. Good value for money, would highly recommend.Read More
I selected Taxcare Accountancy as my accountants after being recommended by my business bank manager. Their rates are competitive and well wo Read More
We chose Taxcare Accountancy as they were instantly helpful. They were offering fantastic advice before we had even agreed to use them. They’ Read More
Taxcare Accountancy was incredibly helpful when I needed help on my taxes. Even though I was in Italy, the distance was not a problem. It was very Read More
Mr Roy and his staff provided me with a user friendly, efficient but cost effective service while successfully resolving issues arising from my tax Read More
We have engaged with Taxcare Accountancy as Accountants and Tax Advisers a while back being recommended by fellow care home owners. In the time the Read More
We met Taxcare first in a local tax seminar; we have been relying on their services since then. We have find them to be completely professional in Read More
The accountants here were very helpful and knowledgeable. I had a last minute account submission and Tax Care Accountants put in overtime to comple Read More
I find the Taxcare team to be both proactive and highly experienced in tax planning. I was initially worried about my tax deadline, but am much mor Read More
Having been with other accountants in business I am in a position to compare services. I am fortunate that I am a client of Taxcare Accountancy. An Read More
Taxcare Accountancy Ltd is a pleasure to work with. They are an efficient team of polite and helpful people. From the very start they have taken a Read More
I have found Taxcare Accountancy, to be extremely efficient & very useful in dealing with my business. Staffs are always courteous & helpfu Read More
Really good! Proactive, knowledgeable and helpful. From the outset we received excellent forecasting, sound advice and support. Not only are they v Read More
We have always found Taxcare Accountancy to be extremely professional, approachable, helpful, supportive and efficient in dealing with my business Read More