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March 22. 2016

Highlights from the Budget 2016

Fuel Duty Frozen

Business Rate Relief

      Taxable Allowances

                   Corporation Tax Cut


The above are some of the highlights from the Budget, announced by the Chancellor on the 16th March 2016.

 There are a lot of positive measures to take from the Budget, especially when considering small businesses and the self-employed. There is a feel for supporting local growth and the measures announced may prompt budding entrepreneurs to follow their business dreams.  

Commencing with the fuel duty freeze, this will definitely appease those who rely on fleet vehicles to run their business.  As a specialist accountancy service for driving instructors, we know this is good news for most of our clients!

For those who operate their business from a commercial property, another highlight to consider is the relief on business rates. From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. Currently, 100% relief is available if you're a business that occupies a property (e.g. a shop or office) with a value of £6,000 or less. There will be a tapered rate of relief on properties worth up to £15,000.

This will affect some 600,000 small and medium-sized enterprises (SME’s) from April 2017. Could this be a vital step on the road to fundamental reform? Furthermore, April 2020 will see business rates been based on the consumer price index (CPI) instead of the Retail Price Index (RPI). The government is also planning to modernise the administration of business rates. This again is a measure to make it easier for businesses, they can then spend the critical resource we call time, actually doing business!

 The Budget brings long term planning with a focus on the next generation. This is encouraging. The increase in personal allowance from £10,600 to £11,000 from 6th April 2016 and to £11,500 from 6th April 2017, will allow people to earn a little more before they start paying tax. This is also a further opportunity for individuals to save with the introduction of the Tax Free Personal Savings Allowance.  Currently for every £100 interest earned, basic-rate taxpayers lose £20 in tax, higher rate £40. Yet from 6 April 2016, the new personal savings allowance means every basic-rate taxpayer can earn £1,000 interest without paying tax on it.

 The final area we would like to mention is the cut in corporation tax, to 17% by 2020 which will affect those who operate limited companies. This will be a positive move for the economy, surely making the supply chain between businesses more efficient, every little helps as they say.

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