Budget 2015: How the New Budget Will Affect SMEs

The recent 2015 budget announced from the Chancellor ahead of the upcoming election has provided SMEs and business owners with some positive news. What did you hope to see, and how do you think that these will affect your business?

Here's what I was hoping to see:

1. Leave entrepreneur's relief alone, or improve it. It does encourage investment in business and needs to be encouraged further.
   
2. Reduce business rates for SME businesses, and especially for small retail businesses so that they can compete better with on-line businesses and so that we can attract diversity back into our high streets.
   
3. Improve National Insurance or Capital Investment Allowances for businesses, to encourage existing businesses to take on more staff and invest in the future.
   
4. Expand and invest more in the apprentice programme - all job roles and all levels. Encourage more on-the-job training and formal apprentice schemes.
   
5. Renew the commitment to reduce red-tape - what ever happened to that initiative/policy?

What happened:

1. Entrepeneurs Relief has Been Tightened

The government has announced that legislation will be introduced to prevent entrepreneurs’ relief applying to certain disposals of shareholdings, where the holding structure for the shares is considered to have been contrived for the purpose of obtaining the relief. 

New legislation will also be introduced to prevent entrepreneurs’ relief being claimed in the disposal of personal assets used in company or partnership business under the “associated disposal” rules, unless there is also a contemporaneous disposal of at least a 5% share in that company or partnership business. There has previously been no minimum requirement to the size of withdrawal from the business. The new measures will affect disposals of assets on or after 18 March 2015.

2. A Comprehensive Review of Business Rates

A comprehensive review of Business Rates has been launched. The government also plan to pilot schemes that reward additional Business Rates growth.

The Budget states “the government wants to ensure that the tax system provides stable and sustainable revenues to fund public services in the least distortive way” and as such will conduct a broad review of business rates to ensure they are still appropriate within a 21st century economy.

3. Improved Access to Finance

The government aim to unlock the potential of the sharing economy, improve access to finance and boost exports. The Budget 2015 also announced that Annual Investment Allowances (AIA) will not fall back to it's previous low of £25,000.

“I am clear from my conversations with business groups that a reduction to £25,000 would not be remotely acceptable – and so it will be set at a much more generous rate".

4. Apprenticeship Programmes to Continue

Osborne made a pledge to continue investment in the apprenticeship programme, offering a 20% payrise for apprenticeships by abolishing NI contributions for employing a young apprentice. The hope is to encourage those to look to taking on apprenticeships as a valid career pathway. 

5. A Renewed Commitment to the Red Tape Challenge

According to the recent budget, there is a renewed commitment to the "Red Tape Challenge" twith last years initiative identifying over 3,200 regulations to be scrapped or improved, bringing over £1bn in annual savings to businesses. 

The Score: 4/5