ESB Accountancy Cheltenham’s bookkeeper view of the budget is that it is a tax and small business review.
ESB Accountancy suggests that there were a number of changes that will affect small businesses, the self employed and business taxes.
A series of actions to tackle tax avoidance and evasion which total £12 billion. This includes moves to end the use of “personal service companies” by public sector staff to minimise tax liabilities.
Business and Corporation tax
A plan to make Britain’s business tax regime simpler to ensure they want to do business here but will pay tax here and will level playing field for small businesses.
New rules to stop multinationals avoiding tax or claiming same expenses against tax in different countries.
Reforms will raise £9 billion extra tax. That will be used to reduce Corporation Tax further – by April 2020 it will be 17 per cent. When Coalition came to power it was 28 per cent.
The move to apply the penal restrictions on the use of losses, that the Chancellor had previously said should apply only to banks, will mean that companies may have to borrow to fund their greater tax payments – at higher interest rates than the government would have had to pay.
As important will be the business tax roadmap, launched today. The 35 page document seeks to set the direction for the rest of the parliament, and has been eagerly anticipated by business. This offers the prospect of modernisation of some of the tax system but with a further 15 measures included under the wide avoidance banner, and sectoral changes, this suggestion will need some further dissection and evaluation.
Higher rate tax threshold
Higher rate tax threshold lifted to £45,000 – “a tax cut for people who should never have been paying that rate in the first place”.
Class 2 national insurance abolished. Those are the ones paid by the self employed. “We’re putting rocket boosters on the back of enterprise,” said Mr Osborne.
Reforms to Business Rates
Apparently 6,000 small businesses will pay no rates and 250,000 have their rates cuts from April 2017. “This is a Budget for small businesses,” said Mr Osborne, to applause from the Conservative benches.
Small business taxes
Big changes to small business taxes with small business rates relief threshold raised from £6,000 to £15,000 and a £1,000 relief for online sellers. Business rates updating will switch from RPI to CPI, the lower measure of inflation to help small businesses.
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