Another Budget has been announced and, as always, business owners are keen to understand how and when this will affect their company, as well as their employees.
The Budget can have an impact on all businesses in the UK, especially small companies that are already struggling to survive, so being aware of the impacts as soon as possible is key to making changes as and when required.
Changes to taxation:
Everyone in the UK above the age of 16 years old will have an increased personal allowance, which is the amount people can earn before income tax becomes payable. The new rate is £10,600 in 2015-16, rising to £11,000 in 2017-18.
Higher rate taxpayers will benefit from the increase in the higher rate threshold to £42,385, which will rise to £43,300 in 2017-18.
Employers that have people aged below 21 working for them will save money, as national insurance contributions will be abolished for them.
Self-employed people will no longer have to pay Class 2 NIC by direct debit from next year, as the amount owed will be calculated and collected along with Class 4 NIC when the annual tax bill is calculated. A consultation will take place sometime this year to discuss whether Class 2 NIC should be abolished altogether.
Fuel duty will remain frozen for 2015, which will benefit many, reducing transport costs.
Those who contribute to charities through Gift Aid will see an improvement, as the annual limit increases to £8,000.
Other benefits of the Budget:
Transport has received funding in the form of a huge investment of £7bn to improve transport links for the South West. Government support will also be given to create 10 Enterprise Zones to encourage growth and the creation of more jobs. This could help SME’s who are considering expansion this year.
Small business rate relief will be doubled for an extra year until March 2016 and the rate of Corporation Tax will also be reduced for those with profits above £300,000, to a rate of 20%. Plans for improvement to broadband have also been announced, along with Research and Development relief increasing to 230% as per the Autumn Statement.
Self-assessment tax returns may also become a thing of the past, as it was announced that individual accounts will eventually be introduced, removing the requirement for a tax return to be completed every year.
Tax avoidance
The Chancellor also announced tougher penalties for those caught evading tax. This is an area where the government is keen to crack down on.
This is just a snap-shot of a few key points, regarding the Budget. Be sure you company is aware of changes that will affect your business and you have the correct professional resource to help your business through the minefield.
It is at time such as these that gaining assistance from a professional advisor, even for just a short time, to ensure you gain the best advice and input the right mechanism, whilst not placing pressure on the resource and time of your current accountancy staff, who may not have the specific expertise.
Gaining expert out-sourced accountancy and financial assistance will help you to minimise taxes, improve cash flow and provide a fresh set of eyes to show you alternative measures and solutions, to ensure your business complies with new legislations, so you can continue to build a successful business and concentrate on the day-to-day requirements of your organisation.
If you would like to know more about outsourced financial and accountancy expert help, to assist you through the budget changes, then call us now for a no-obligation chat.