“This is a Budget for small businesses,” George Osborne declared yesterday, attracting rapturous applause from the House when he made his eighth Budget speech.
Business rates saving us £7bn a year, stamp duty changes for commercial property transactions, a promise to reduce corporation tax to 17% and measures to stop large organisations ‘moving’ profits to reduce corporation tax, little wonder Chancellor George Osborne declared yesterday’s (16 March) Budget as a triumph for small businesses.
The chancellor applauded our nation of shopkeepers and small businesses, the backbone of the UK and the drivers of the economic recovery. Which includes us here at Carvue and the overwhelming majority of our users.
Business Rate Cut
According to City AM’s report 630,000 businesses will no longer have to pay business rates. The chancellor said it meant 250,000 businesses will benefit from a rate cut.
We will have to wait until April next year though when the measures come into force.
Chances are, some of you, if the unit where you run your business has a rateable value of £6,000 or less, will already be claiming a 100% rebate.
The new measures mean properties with a rateable value of £12,000 or less will pay no business rates with a tapered rate for properties up to a rateable value of £15,000.
Osborne announced the reduction will save businesses a total of £7bn a year although a small company can expect to save around £6,000 a year.
Future business rates increases will also be based on the consumer price index rather than the retail price index, with the intention of creating more accurate rates bills.
New Commercial Property Stamp Duty Bandings
From midnight today (17 March 2016) the stamp duty on commercial property will work along the same lines when buying a house. The stamp duty is no longer applied to the entire value but will be banded with the extra being paid on the amount which falls into the next band.
The measure should result in 90% paying less or remaining unaffected but like houses, the higher the property value, the more stamp duty you will pay. It is estimated around 9% of transactions will be affected and is set to raise £500m a year.
We will have to wait until 2020 but the promise that we’ll be paying 17% corporation tax was underlined by the chancellor. Currently, we pay 20%, which itself was reduced from 28%, and is the lowest in the G20 (the 19 countries with developed economies with the 20th seat held by the EU).
No tax escape for big multinationals
And there was another bonus. If, like us, you were a bit miffed that your garage had paid more in corporation tax than Facebook before it announced the company had made changes after coming under fire. The government, however, wasn’t going to take any chances or allow other large corporations to escape paying their fair share of corporation tax and introduced measures to make sure ‘large companies can’t artificially shift profits out of the UK’.
The government expects to raise nearly £8 billion from large companies and multinationals by changing some of the rules.
Fuel Prices frozen again
If you’ve been watching the prices creep slightly north at the fuel pumps over the past few weeks, the continuation of the fuel duty freeze was also welcome news.
There was, however, a warning from the chancellor who pointed to global economic storm clouds gathering which will certainly have implications for us here in the UK.
How will it affect you?
Will your garage benefit from the chancellor’s measures? And, do you agree with him? Was it a good Budget for small businesses? Let us know below…we’d love to hear from you on whether you stand to benefit and how!