The recent budget delivery by the Chancellor of the Exchequer has put in place some measures that will directly affect small business owners.
Are all of these measures good?
Below is a brief synopsis of what changes will come into place that may or may not affect your business.
1. National Insurance cuts
From April 2014 a third of all employers in the country, or 450,000 small businesses, will now not have to pay any national insurance contributions at all. George Osborne states “For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed. They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.”
2. Increase in tax-free personal allowance
As of 2014/15 everyone’s tax-free personal allowance will be increased by £560 to £10,000. This means if you are a start-up company but taking a small salary you won’t pay tax (unless you go above that figure).
3. Increase to the employer loan limit
If you do have employees and offer them tax-free loans i.e. for season travel tickets, the limit has now been doubled to £10k.
4. Fuel duty staying the same
There was a plan to increase the current 3p fuel duty later this year which has now been scraped, this means that fuel duty will have been frozen for almost 3.5 years according to the government.
5. No help on corporation tax
Whilst there will be a reduction in the main rate of corporation tax for big business from 21% to 20% apparently giving the UK “the lowest business tax of any major economy in the world”, this will not be of any help to small businesses since there will be no cut in taxes paid on profits under £300k.