Summer Budget 2015: Need-to-know small business policies
The chancellor has announced changes to Sunday trading hours, corporation tax and the introduction of a new National Living Wage...
In the first fully Conservative budget since 1996, chancellor George Osborne today announced a raft of proposals to “put UK economic security and working people first”.
Emphasised as a “big budget for people with big ambitions to secure Britain’s future”, Osborne outlined landmark changes to Sunday trading hours, Corporation Tax and the headline-grabber – a new Living Wage, which will all impact upon the country’s small and medium businesses.
Read on to find out the key small business policies of the summer Budget…
Changes to Sunday trading hours
Marking the biggest change to trading laws since the reforms of the 1990’s, Osborne has confirmed earlier speculation that responsibility for Sunday shop opening and closing hours will be devolved to local authorities and city mayors. Osborne has claimed that this change will enable local areas to have a greater say over their own economies.
Peter Burgess, director at Retail Human Resources, supports the government’s decision to reform Sunday trading hours:
“It is archaic that large shops still have to close for much of the day on Sunday which is one of the most important shopping days of the week. People do not have to shop on Sundays if they don’t want to; no hands are being forced here. By increasing the time allowed for large shops to open this will reduce pressure on Saturdays and will, in turn, create more jobs. It should be up to local communities to decide, as has been suggested.
“As for convenience stores, they retain their advantage of being convenient as opposed to out of town or in a major shopping area where it is quite often difficult to park. Given the massive swing away from large supermarkets to the High Street, I would have thought they have already had the help they claim they need.”
Claiming to have already “brought business back to Britain” with the 20% reduced rate of Corporation Tax, the chancellor has announced that corporation tax will be cut to 19% in 2017 and 18% by 2020. Osborne said the cuts will help “businesses grow and invest with confidence” and will benefit over a million companies.
Howard Sears, managing director of venture capital firm Astuta, has said “this was a frankly barnstorming Budget”:
“Confidence among UK businesses is already strong but these latest reductions in corporation tax will supercharge it.
“As well as sending out an important message to UK business owners, the reduction in corporation tax will give them a strong competitive edge and the all-important breathing space to grow.”
New National Living Wage
Arguably the biggest annoucement of the summer Budget, Osborne has detailed plans for a new National Living Wage. The wage will start at £7.20 an hour from April 2016, rising to £9 an hour by 2020 for people 25 and older. Osborne declared that “Britain deserves a pay rise”.
National Insurance contributions
From April 2016, the government will increase the National Insurance contributions (NICs) Employment Allowance from £2,000 to £3,000 a year to help businesses with additional wage costs. Obsorne stated that the increase in Employment Allowance will mean businesses are able to employ four workers full-time on the new National Living Wage, without paying any NICs.
Annual Investment Allowance
The annual investment allowance will be set permanently at £200,000 from January 2016 – businesses will be able to deduct the full value of certain items, such as equipment and machinery – up to a value of £200,000 from their profits before tax. The increase is intended to help businesses plan for long-term spending as it gives full tax relief in the year items are purchased rather than over several years.
Mark Sismey-Durrant, CEO of Hampshire Trust Bank, thinks the increase of the Allowance could be “the catalyst small businesses need to invest and grow their companies”:
“Small businesses can only succeed with the appropriate financial support and guidance from both the government and industry and therefore today’s announcement by the chancellor will go towards supporting the small businesses which represent almost 50% of our economy.”
Fuel duty will be frozen this year, as previously confirmed in the spring Budget.
Click here to read the summer Budget in full.