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The Mini Finance Bill
The Finance Bill 2017 was to be the largest at 762 pages but in order to rush it though it was cut to 148 pages!
That’s an 80% reduction dropping 72 out of the 135 clauses and 18 out of 29 schedules.
One of the items dropped was Making Tax Digital (MTD).
But its widely expected that following the general election there will be another bill to bring in all the items that were dropped.
Our tax system is already far too complex:
- 6,102 pages of legislation (according to Tolleys in 2012)
- 639 monetary values
- 425 thresholds
- 214 penalties
Its a shame they couldn’t cut all the tax rules by 80%!
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What has the government done for businesses?
https://stevejbicknell.com/budget-2016/budget-2/
I think the most important changes for businesses are:
Corporation Tax
The main rate of Corporation Tax has already been cut from 28% in 2010 to 20%, the lowest in the G20. It will now be cut again to 17% in 2020, benefiting over 1 million businesses.
Business Rates
From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates.
Currently, this 100% relief is available if you’re a business that occupies a property (e.g. a shop or office) with a value of £6,000 or less.
There will be a tapered rate of relief on properties worth up to £15,000. This means that 600,000 businesses will pay no rates.
Capital Gains Tax
From April 2016, the higher rate of Capital Gains Tax will be cut from 28% to 20% and the basic rate from 18% to 10%.
There will be an additional 8 percentage point surcharge to be paid on residential property and carried interest (the share of profits or gains that is paid to asset managers).
Capital Gains Tax on residential property does not apply to your main home, only to additional properties (for example a flat that you let out).
Employers Allowance
The NICs Employment Allowance was introduced in April 2014, for the purpose of supporting businesses and charities in helping them to grow by cutting the cost of employment. Eligible employers can claim the allowance, which reduces their Employer NICs bill by up to £2,000 a year. This is an ongoing allowance. Once an employer has claimed the allowance, they will continue to enjoy it in future years, without needing to do anything further. Over a million employers have benefited from the allowance since its introduction.
This measure will increase the Employment Allowance by £1,000 to £3,000 from April 2016. This means eligible business and charities will be able to claim a greater reduction on their employer NICs liability.
This is fantastic news for employers, but there is a potential sting in the tail.
HMRC plan to exclude one person businesses!
But many believe that HMRC’s plan won’t work because all you need to do is employ a family member or friend and then the one person should qualify for the allowance.
John Cullinane, CIOT tax policy director, said: “The government may find its plan to be ineffective in reducing employment allowance claims because it is open to abuse. It will simply have the effect of penalising single director-employee limited companies that are unable to, or do not know that they could, appoint another person as director or employee to claim the allowance.”
Its not all bad….
steve@bicknells.net
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Budget 2013 – £30m in Vouchers for Small Businesses
In yesterday’s Budget you might have missed this announcement
Growth vouchers for small businesses
£30 million will be made available over two years. This will address a gap in the market for providing external business advice such as making a successful loan application to a bank or taking on an employee.
Back in September 2012 the British Chambers of Commerce were asking for £100m in vouchers of £5,000 per Business, open to up to 20,000 small and medium-sized businesses, but £30m is good start.
To test the approach, “a new marketplace for external business advice” will be created.
Advice could be focused on the following areas:
- Legal, HR, accounting advice: As businesses expand, accounting and HR systems become more complex, and small businesses in particular can struggle to make sense of employment law and tax systems. Advice would help businesses understand these complex functions, allowing them to be more efficient, and focus on growth.
- Access to finance advice: Smaller, younger, and high-growth businesses often have more difficulty accessing finance than more established firms, and some are unaware of the options available outside traditional debt finance. Advice could also address the problem of discouraged demand, and may result in more businesses obtaining finance to boost investment plans.
- Marketing advice and training: Helping businesses with marketing their products and services here and importantly in overseas markets could lead to more sales, and growth opportunities for many firms.
- Planning support: The complexity of the planning system means many businesses need to hire in external consultants at a high cost. The costs will often put firms off expansion, so offering companies free advice would help motivate businesses to grow and expand their premises.
- Staff training: Workforce skills consistently rank among the top three concerns among Chamber members across the country. As businesses expand and develop their goods and services, increased staff training is often needed to help firms grow.
- Export advice: Urgent action is needed to support the UK’s potential and current exporters to help rebalance the UK economy towards exports. Many businesses do not have the advice or skills they need to break into new markets. Export training and access to market intelligence and trade shows and missions, could help many businesses take the first step to exporting, and open new markets for current exporters.
steve@bicknells.net
