George Osborne delivered the Autumn Statement whilst the rest of the country eagerly awaited to see if he had listened to any feedback after the summer budget. And with the exception of Landlords, small businesses should be pleased, as it appears the chancellor has actually heeded the commentary, and has kept most of the assistance in place.
Osborne said: ‘We understand there is no growth and no jobs without a vibrant private sector and successful entrepreneurs. So this spending review delivers what businesses need.’
Small business rate relief stays
The small business rate relief remains in place until April 2017 which is good news for individuals planning to start up.
Businesses with property that have a rateable value under £6,000 will be exempt from business rates, properties with a rateable value up to £12,000 will also pay a reduced rate.
New Enterprise for local Business
A £12billion local growth fund was put aside, to work with local enterprise partnerships (LEPs), 26 new or extended enterprise zones has been revealed and up to a third of those will be in the North. This is part of the chancellor’s commitment to create a Northern Powerhouse. The aim is to balance the north/south divide by spreading economic power and wealth across the UK.
The Enterprise zones, will give businesses in specific sectors business rate discounts and enhanced capital allowances.
15 zones will be in smaller towns and rural areas, including our local Lancashire Enterprise Partnership which has a site at Hillhouse Business Park in Thornton-Cleveleys. The local plans are to target energy and advanced manufacturing sectors which will create many new jobs for the area.
Entrepreneurs’ relief untouched
Many breathed a sigh of relief as the chancellor left Entrepreneurs’ relief unscathed. Entrepreneurs may continue to enjoy reduced capital gains tax rate of 10% for directors owning more than 5% of a company, up to a lifetime allowance of £10 million. This is in comparison to 18% paid by basic tax payers and 28% tax payable by those higher rate taxpayers.
Buy-to-Let Landlords hit even harder
In the summer budget, the chancellor revealed the changes to the mortgage interest relief along with the changes to the wear and tear allowances for landlords. We have previously written a blog on the mortgage interest tax changes with suggestions to how you can mitigate some of the added expense.
To add to this, it’s now been disclosed that landlords will also have to pay an extra 3% stamp duty on new property purchases above £40,000. This is obviously an extra expense if you are considering increasing your portfolio. However when you come to sell your property, it can be put to reducing your capital gains bill.
All digital future with HMRC
The government is intending to ditch paper self-assessment tax returns as everything goes digital. Small businesses will have digital access by 2016/17. And by 2020, businesses will be required to update their online account on a quarterly basis. How this is actually going to work, is still to be divulged.
Do you have any questions?
As always, we are here to help you, if you have any questions relating to the new legislation and how it affects your business, please get in touch on 01253 899989 or you can book a free consultation.
