You may not have noticed, but it was budget day yesterday. Here's our
roundup of the things that we think could be of most interest and
practical use to owners of small businesses. As usual, it's far from
exhaustive - if you want a complete rundown of everything there are
plenty of places that will provide it!
National Insurance savings for employers - from 2014
So,
this is probably the biggest thing for many small businesses. From 6
April 2014, employers will get let off the first £2,000 of Employer's
National Insurance that they'd normally pay. So, if you're in that
position that's money in your pocket. Of course, your profits will have
gone up as a result, so you'll have a bit more tax to pay - a small
company that benefits from the full discount will see its profits go up
by £2,000, and therefore its corporation tax bill go up by £400. So the
real benefit to the company is £1,600. But it's still worth having!
If you're a "director-only" company and have no National Insurance
cost at present, it seems unlikely this change will benefit you that much, as it eliminates Employer's National Insurance but not
Employee's National Insurance, meaning that it's unlikely to be massively
beneficial to pay a significantly greater PAYE salary to take advantage
of the concession.
Corporation Tax
As ever, all the headlines about
corporation tax going down only apply to big companies (or, at least,
companies making big profits). For a company with profits of £300,000 a
year or less, corporation tax was at 20% and it remains at 20%.
Income Tax
As was widely predicted, the personal
allowance (i.e. the amount you can earn free of tax) will go up to
£10,000 - from 6 April 2014, not now. That's only actually about a 6%
increase on the year to come, so not a massive difference, but will of
course be welcome to many - it'll be worth £112 a year to basic-rate
taxpayers.
Childcare Tax Break
From next year, parents of children under 5 will effectively be able
to get £1,200 of childcare paid for by the state, per child, as along
as they're not getting a childcare element to their tax credit
payments. This applies as long as a) both parents work and b) household
income is less than £300,000. Given that the government has in the
last few months begun to withdraw child benefit from households where
someone earns more than £50,000, you might question the logic of
introducing a new flat-rate child payment that you can still get if you
and your partner each earn £149,999. So would we.
SEIS extended
The Seed Enterprise Investment Scheme is
something we've talked about before, offering income tax savings on
investments in new businesses. I won't explain it again, you can read
about it here:
http://tinyurl.com/cvr6k7x
Anyway,
for the current tax year within the scheme there was also an
opportunity to reduce or eliminate existing Capital Gains Tax bills by
reinvesting in a company via SEIS. That opportunity was supposed to
cease on 5 April - but it's being extended for another year.
Tax reliefs for creative industries
The government
confirmed the introduction of a tax credit for companies "involved in
the production and development of culturally British animation, high-end
television drama and documentaries, and video games". However, at the
moment it appears that the beneficiaries will be the actual companies
producing the animation/film/game, rather than any subcontractors, and
that animation for advertising purposes won't qualify.
Help to Buy
This will be of no particular use to 99%
of people, but very valuable to a few. Essentially, the government will
apparently lend you most of the deposit for a new-build house, or
guarantee most of your mortgage, on the condition you repay them at a
later date. Of course there are plenty of questions one could ask about
this - what happens if the house goes down in value and you want or
need to move, for example. But there's no detail on the scheme yet
anyway - with the previous FirstBuy scheme it was many months before the
loans actually became available, so don't start looking at places this
minute!