The Budget Made Simple

March 23, 2015 by Andy Crow

The Budget made simple

So last week saw the last Budget given by George Osborne before May’s General Election. Was it full of sweeteners for businesses or was it full of hot air?

Here is our assessment of how it affects you and your business, so make up your own mind.

Abolition of Class 2 National Insurance Contributions
Class 2 NICs will be abolished in the next Parliament and Class 4 will be reformed to introduce a new contributory benefit test. The details of this will be discussed later in the year.

Self-Assessment tax return reforms
The government plan to simplify tax administration by abolishing the annual tax return. This will make tax simpler and enable tax and NICs to be collected through digital accounts instead of the annual self-assessment.

Rise in Personal Allowance
The amount you can earn before tax is set to rise from £10,600 is 2015-16 to £10,800 in 2016-17 and £11,000 in 2017-18.
Higher tax threshold at which people start paying 40% income tax is also set to rise above inflation from £42,385 to £43,300 in 2017-18.

Review of Business Rates
A comprehensive review of Business Rates has been launched. The government also plan to pilot schemes that reward additional Business Rates growth.
The government wants to ensure that the tax system provides stable and sustainable revenues to fund public services in the least distortive way” and as such will conduct a broad review of business rates to ensure they are still appropriate within a 21st century economy.
Local Authorities are also encouraged to use their business rates discretionary relief powers to support the sharing economy, which includes shared workspaces and maker spaces.

Improved access to finance and markets
The government aim to unlock the potential of the sharing economy and improve access to finance. The British Business Bank has published a request for proposals to pilot its Help to Grow scheme, which will make growth finance available to high potential firms. Alongside this, the government will do more to inform SMEs about the support already available to them and their options for accessing Better education and support for SMEsSMEs will also gain further information on how to access and use legal services, which will be included on the Citizens Advice and the GREAT business websites.
ISA reforms will allow savers to withdraw and replace money in the same tax year without losing their tax advantage.
The lifetime allowance for pension tax relief will be indexed by inflation from 2018.If you would like further information please contact Chorus Business Advisers on 0845 8671263 or email info@chorusadvisers.co.uk.