‘Gorgeous’ George Osborne has opened his big red briefcase and revealed his 2015/2016 #budget.
According to Osborne, the UK has the highest rate of employment in its history. However other experts are saying that, at £80 billion, we also have the highest deficit of any advanced economy.
Of course these massive numbers are great for newspaper headlines, but they may not feel as important if you’re on the frontline of business, running your own firm or working in a small enterprise.
What might the budget do for SMEs?
One major change that will affect us all is that annual #tax returns will be scrapped by 2020. The government wants everything to be done online and the theory is that submitting returns throughout the year, instead of all in one big clump, will make everything simpler.
Except that ‘online’ and ‘simpler’ aren’t always two words that go to together when the government is involved. Expect there to be bugs, delays and calls to #HMRC complaining about systems that don’t work. As always, keep your own records and don’t rely on the government’s systems to get it right.
Class Two National Insurance Contributions for people who are self-employed will be abolished in the next Parliament. At first I thought this would be fantastic and we’d all be saving pots of money. Then in Accountancy Age I read one estimate that this amounts to a saving of £2.75 a week.
Don’t get me wrong, it’s always good to save something, but £2.75 doesn’t even cover the cost of a pint in London (so much for Osborne cutting duty on booze).
More substantially, if you employ staff under the age of 21, then from April you don’t have to pay their Employers’ National Insurance Contributions. Combine that with not having to pay contributions for young apprentices you take on, albeit this happens in 2017, and we should hopefully see more businesses hiring young people.
Big news is that the planned fuel duty increase due in September has been scrapped. This should represent a substantial saving for any business that has to run vehicles. (Or for any delivery drivers that like doing doughnuts in the car park while the boss is away. And who don’t realise that while they are away, the boss sneaks in and does doughnuts too.)
How might it affect you?
For employees, it’s good news that the personal tax allowance is going up to £10,800 in 2016 and then £11,000 in 2017. It’s said this will cut tax for up to 27 million people, saving an estimated £900 a year.
(As an aside, I’d really like to know how they figure these numbers out. Why not just jump to £11,000 right away?)
A small change which is a bit better for employees, but perhaps neither here nor there for some SMEs, is a 20p per hour rise in the Minimum Wage. This autumn it goes up to £6.70.
If you’re the sort to put your annual bonus in the bank, rather than spending it heading to the beach, a new personal savings allowance also comes into force in 2016, meaning that the first grand of your savings income will be free from income tax.
That sounds great, but how much money do you have to have saved to earn anywhere near £1,000? Interest on savings accounts is universally terrible these days.
The annual savings limit for #ISAs goes up to £15,240 and a new new flexible ISA is to be introduced in the autumn. You can take out cash and put it back – but without this affecting your annual ISA allowance.
What do you think of the budget? Has Georgie Boy has done enough for businesses or does he need to work harder to earn his money?
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