The announcement of Wednesday’s 2013 budget provided no real surprises but maybe some hope for businesses; we briefly examine changes and what they will mean.
The chancellor spoke of building the most competitive tax system in the world and wanting to support entrepreneurial spirit.
Corporation tax will be reduced by 1% to 20% in April 2015 to show that “Britain is open for business”, but the bank levy rate will increase to offset this by 0.142%
New measures against tax evasion are expected to bring in £3 billion in unpaid taxes. Three new anti-avoidance measures will target specific situations including corporate losses, partnerships and the use of off shore employment intermediaries. These measures reiterate the government’s policies creating a highly competitive but tax payer compliant system. The overwhelming majority of economic activity is already compliant but these newly announced measures are hoped to bring those that aren’t in line.
A new employment allowance is to be introduced that will cut the first £2,000 from employers NI bills. Around 450,000 small businesses will now pay no NI at all, around a third of all employers. This will be of little impact to larger companies but it will more than likely mean that smaller businesses can afford to hire more staff.
Infrastructure will be boosted £3 billion a year from 2015-16 onwards which could provide medium term opportunities for the construction industry.
Anthony Fisher, Managing Director of Focus Insolvency Group commented, “It is encouraging to see that the Chancellor has helped businesses by reducing Corporation Tax and the costs of employing people. This should put more in the pockets of companies who will then be more willing to invest and hire employees. The UK economy must be attractive to business owners to obtain investment and growth.”
Businesses looking for safety and stability in the budget will have likely found what they are looking for, however the current economic environment will mean that growth will still be slow.
If you require any advice for your own business or for a client then please do not hesitate to get in touch.