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Budget Speech 2014: Impact on SMEs and business owners

by Sable International | Mar 31, 2014
  • Following the launch of the Business Bank and the Growth Vouchers scheme earlier in the year, Chancellor Osborne's recent Budget Speech had some good news for small and medium-sized businesses.

    Changes that affect SMEs

    • The Seed Enterprise Investment Scheme – largely considered a generous tax relief initiative for those who invest in small firms – has been made permanent.
    • Government is doubling the amount of lending available to exporters to £3bn.
    • Chancellor Osborne announced a £7 billion package to help cut manufacturers’ energy bills.
    • The Annual Investment Allowance for new capital expenditure doubled from £250,000 to £500,000, and has been extended to the end of 2015. 
    • The grant for small businesses to support 100,000 more apprenticeships was extended.
    • Business rates discounts and enhanced capital allowances in enterprise zones have also been extended for a further three years.
    • The corporation tax top rate will be reduced to 21% from April 2014, and to 20% from 2015.
    • Research and development tax credits have been increased from 11% to 14.5% for small- to medium-sized companies.
    • The introduction of the £2,000 Employment Allowance from April 2014 will further support businesses to create jobs, and lift 450,000 employers out of Employer NICs altogether.

    Changes that affect business owners

    The following changes will be implemented on 6 April. They are more personal in nature compared to the above, but are relevant to anyone who runs a company.

    • The personal tax-free allowance increases from £9,440 to £10,000 for anyone born after 5 April 1948.
    • The threshold after which National Insurance becomes payable for companies and individuals increases from £7,696 to £7,956 per year.
    • The threshold for higher rate tax (40%) increases from £41,450 to £41,865
    • The Personal Allowance for people with income over £100,000 will continue to be reduced by £1 for every £2 of income above £100,000.
    • The additional rate of tax continues to be 45% for income above £150,000.
    • The annual exemption for Capital Gains Tax increases from £10,900 to £11,000.

    For any tax advice related to your SME or business, please visit our website. Sable International has over 17 years’ experience in providing flexible accounting services to suit every contractor’s needs.

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