What the 2015 Summer Budget Means for Small Businesses
is4profit takes a look at the central policies in Osborne’s “bold” second budget for “hard-working British people”
The first fully Conservative Budget in 18 years was announced by the chancellor today, with talk of a new National Living Wage dominating the agenda.
In his speech, George Osborne highlighted the importance of business for the British economy and said that enterprise investment is 31.9% higher than 2010 (revised up again this year).
Osborne claimed that the Budget is a strategy to keep “this growth going and change the UK from a low wage, high tax, and high welfare economy; to the higher wage, lower tax, lower welfare country we set out to create”.
Read on to find out more about the key policies set to influence your business’ future:
Corporation tax cuts
Arguably one of the most significant measures that will affect UK business is the government’s plan to cut corporation tax from 20% to 19% in 2017, and then to 18% in 2020. This, Osborne says, will benefit over a million businesses.
Changes to Sunday trading hours
One of the most widely speculated measures before the Budget announcement, Osborne today confirmed that Sunday opening and closing hours will be devolved to local authorities and mayors.
National Living Wage increase
Starting next year (April 2016), the National Living Wage will increase to £7.20 for anyone over 25 years-old and will eventually rise to £9 an hour by 2020.
National Insurance contributions
In reaction to the increase in the National Living wage, businesses’ employment allowance will increase from £2,000 to £3,000 from April 2016. This will mean a reduction in National Insurance Contributions (NICs) for business owners, and companies can employ four fulltime staff on the national wage without having to pay NICs.
Annual Investment Allowance increase
The Annual Investment Allowance – which was temporarily increased – will be permanently set at £200,000 from January 2016 onwards.
The allowance means companies can subtract the full value of certain items, such as business equipment, to a total value of up to £200,000 from their pre-tax profits.
Power to the Northern Powerhouse
Osborne has announced a £30m fund for the Transport for the North (TfN) over the next three years, with local authorities having more control over local transport and policies.
This, according to Osborne, is the start of a more collectively dispersed power throughout UK, with the chancellor reiterating claims that the government will be increasing the number of “enterprise zones”.
Fuel duty will remain frozen
As confirmed in the spring Budget, fuel duty will remain frozen for 2015 making it the longest duty freeze in over two decades.
For more information on the summer Budget, take a look at the full transcript here.