Is your business a winner or loser after The Budget? Bobby Lane, a partner at accountancy firm Shelley Stock Hutter gives his verdict.
For larger companies the rate of corporation tax will come down to 20% from 2015 but for smaller companies with profits of less than £300,000 there has been no change.
A reduction in the rate for smaller companies would have meant more profits available to reinvest in the business - perhaps towards the cost of a new employee, investment in equipment or research and development into new products.
Access to funding
There were hints that the Funding for Lending Scheme ( The Government’s attempt to boost lending to businesses and households by offering lenders cheap funding as long as they promise to maintain or increase their net lending levels) will be extended. However with no further detail at this stage and with the jury out as to whether this is helping businesses at all, I wouldn’t hold my breath!
The Chancellor announced a £2,000 contribution towards the cost of employers national insurance for companies. This is good news for those very small businesses that were wondering whether to take on someone or not. However this will not come into effect until 2014.
From 2014 the personal allowance will be increased to £10,000. This is not a direct benefit to companies but will increase the amount that people will see in their pay packet.
What was missing?
Wouldn’t it have made more sense to extend the National Insurance Holiday to London and The South East and include existing businesses rather than just start-ups?
Whilst the business bank and new growth vouchers were mentioned there was no explanation as to how this will help smaller businesses.
Crucially for other Government initiatives such as the Seed Enterprise Investment Scheme and Enterprise Finance Guarantee Scheme, there needs to be an education campaign rolled out for businesses so they are armed with all the right information and the best way to access a loan or receive investment.