Case closed. The red one that is. Well, for another year at least, before being dusted off once again and ceremoniously held at arm’s length to a flurry of flash-happy photographers trying to get the best shot, whilst chancellor Osborne prepares to give his.
The question is, what’s in the bag for our energetic entrepreneurs and startups following yesterday’s announcement? In case you didn’t manage to follow our live tweets during yesterday’s coverage, or had your head in the sand, here’s the lowdown.
Business rates discounts and enhanced capital allowances
Both business rate discounts and enhanced capital allowances will be extended in enterprise zones for another three years. Also, firms in premises with rateable values of up to £50,000 will get discounts worth £1,000 off their bills for the next two years whilst businesses moving into vacant high street properties will benefit from a 50% discount.
Annual Investment Allowance
The annual 100% tax allowance for investment has been doubled to £500,000 and will continue to run to the end of 2015. However, unless you’re planning to buy more than £250,000 worth of equipment for your business in the near future it’s a bit of a moot point and not necessarily of much use to the smallest of businesses.
Class 2 NICs
The “wholly unnecessary bureaucracy”, as the chancellor put it, in relation to the collection of Class 2 National Insurance contributions (NICs) will be moved into self-assessment. But this won’t be until 2016 so there will be two more years of “wholly unnecessary bureaucracy” for SMEs to contend with.
There will be a 1% drop from 21% to 20% whilst under-21s will be taken out of the jobs tax. The abolishment of national insurance for the under-21s may signify a downturn in youth unemployment, which currently remains much of a challenge, but may also positively encourage smaller companies to employ young people which in turn should encourage more productivity.
UK exports look set to reach £1tn by 2020 with an estimated 100,000 more UK companies to be exporting by 2020. At least that’s what the government hopes and a doubling in the finance available to exporters from £1.5bn to £3bn shows it means business. As does cutting by a third the interest rates on loans to exporters. With two thirds of small firms in the UK currently not trading abroad, this should serve as a reasonable incentive to start looking overseas.
September’s fuel duty rise has been scrapped, which will be a welcome call for companies relying heavily on transportation.
Seed Enterprise Investment Scheme (SEIS)
The SEIS, introduced to help finance start-ups, will be made permanent, providing tax relief, including the 50% capital gains tax reinvestment relief, for investors in certain small businesses. An ideal opportunity to attract investment for any company eyeing up growth in the near future.
A £7bn package to cut energy bills for British manufacturers and households will attempt to help businesses compete better overseas whilst alleviating pressure from struggling consumers. There’s arguably not much benefit for start-ups here as it seems to be directed towards medium-sized energy intensive manufacturing businesses.
The government is throwing its support behind 100,000 new apprenticeships with a tidy £85m funding pot. Similar to the abolishment of national insurance contributions for under-21s, this provides a further incentive for smaller companies to employ more young people. A recent Sage Omnibus survey found less than one in five small businesses currently employ an apprentice. Brendan Flattery, CEO of Sage UK labelled it a “massive missed opportunity.”
New “big data” institute
Named after the famous computing code breaker, the Alan Turing Institute will be set up to boost Britain’s IT prowess and focus on new ways to collect, organise and analyse large sets of data. With the recent announcement of a £170m cash injection for Brighton’s tech hub in the works, thanks to the Greater Brighton City Deal, it seems the government are really looking to expand the country’s tech base with all (soldering) guns blazing.
Tax relief for touring theatre productions
Oh no he didn’t! Oh yes he did! A tax relief of up to 25% will apply for roaming thespians.
Private jets, previously not taxed, will see tax levied on all flights
Okay, so perhaps we can’t afford that Learjet just yet, but we can all dream, can’t we?
“Businesses wanted a budget that was disciplined, focused and geared toward the creation of wealth and jobs and that’s what the chancellor has delivered,” said John Longworth, director general of the British Chambers of Commerce.
“As with any budget, there were some populist measures that were not at the top of business’s wish list. Luckily, these were far outweighed by considered measures to support business growth and wealth creation.”
It’s hard to disagree with Longworth although we can’t help but wonder whether start-ups could have got more from this year’s budget. Oh well, at least the pubs are celebrating. Another penny off a pint? Cheers George!