Billed as the “budget for people aspiring to work hard and get on”, these were the immortal words uttered by George Osborne during his delivery of today’s budget.
Inspired and full of hope, we were encouraged to hear of The Chancellor’s plans to help small businesses and innovation. A five fold increase in the value of government procurement budgets spent through the Small Business Research Initiative should prove to be a significant boost for small companies seeking to engage with the public sector.
Also, good news for start-ups looking to grow: from April 2014, a new £2,000 a year employment allowance will be introduced for National Insurance contributions from businesses and charities. This will make hiring that new member of staff more affordable and so company growth that little bit more achievable.
Lastly, the reduction in corporation tax to 20% (a worldwide low!) should bring a much needed boost to many companies. However, realistically this will be of no help to the smallest companies with profits less than £300,000, where perhaps this saving would actually be most beneficial.
Overall, this wasn’t quite the ‘entrepreneurs budget’ that we were all hoping for, but during a time when cutbacks are commonplace, there were a few nice bones thrown our way. Here are a few other key announcements that we thought could give SMEs something to smile about:
- Increase in the personal allowance on income tax to £10,000 in 2014-15.
- Creation of a single competitive pot of funding for local enterprise.
- Pledge to make the most of apprenticeships.
- Increased childcare support through the introduction of a Tax-free Childcare Scheme up to £6,000 per child from 2015.
- Cancellation of the planned September fuel duty increase and a two year freeze in fuel duty.
Possibly the most important of all however is for that Friday night team bonding, is that the beer duty escalator has been cancelled, with an actual reduction in cost by a penny a pint from 25th March. Not such great news for those with a different tipple of choice though with alcohol duty on the whole set to rise.
So, now that the proverbial cat is out of the bag and companies know what to expect for the coming tax year, perhaps for now best to keep those champagne Bellinis on ice and hold out for that well-earned pint instead.