The recent release of the Chancellor’s budget for 2016 has us thinking about the impact on small businesses for the coming year. With features such as Business rates, Corporation tax, Capital Gains Tax, Fuel Duty, and Stamp Duty, this no doubt is going to interest and engage the future of small businesses.
The change to business rates will increase the threshold for claiming small business relief from £6,000 to £15,000 from April 2017. This would indicate that an estimated 600,000 small firms would not have to pay business rates, and then that a further 25,000 will only need to pay reduced rates as of April 2017. Along with the main rate of Corporation tax being reduced to 17% from the current 20% as of 1 April 2020, this is surely good news for SMEs.
The Chancellor has also reduced the Capital Gains tax with regards to the sale of equity down from 28% to 20% and the basic rate from 18% to 10% as of April 2016. A change that should show the impact of this budget from May onwards.
In other positive news the Fuel Duty is not going to be changed at all for this budget (it had been expected to be increased), this is a welcome relief alongside the immediate introduction of Stamp Duty Land Tax for which only a portion of the consideration on the rate for non-residential freehold and leasehold transactions will be payable.
Whilst these have the benefit of helping the day-to-day cash flow for small businesses it is widely viewed that the changes by their nature do not help the companies pay HMRC, suppliers, or any employees. It is important to note that it is useful to help with the long term prospects, but what should be done about the present to help SMEs?
One possible answer to this is the continued appeal of business finance provided by independent brokers such as Johnson Reed. With our panel of available funds and an excellent approval rate – even for small businesses – many are finding that a short-to-medium term finance or leasing deal can help with the cash flow today.
