What does the Budget 2016 mean for small businesses?

Admin tax news, Tax Planning

The 2016 Budget Statement was given yesterday by Chancellor George Osborne. In the statement the Chancellor defines his proposals as “a Budget for small businesses.”

The key headlines within the Budget statement are reviewed here by Dawn Whiteley, CEO of National Enterprise Network. 

“At NEN, we always look at budget statements in lots of detail, to understand how each and every decision affects the small business sector – a sector we happen to think is the lifeblood of our economy.

Following whisperings recently about changes to business rates, in one of the biggest announcements these were confirmed yesterday. The changes will mean that around 600,000 small businesses will no longer have any business rates to pay. A further 250,000 small businesses will have their rates cuts from April 2017. A significant outgoing for any small business is its overheads and these changes will ensure there is a benefit to be had for many.

Corporation tax is also to be cut from the current rate of 20% to 17% by 2020. This has a clear impact for small business owners, as does the removal of the Class 2 NI contributions for the self-employed.

Fuel costs are something which concern many small businesses so the freeze announced on fuel duty will be welcomed. The Chancellor described this initiative as “the tax boost that keep Britain on the move.” Keeping costs down for a small business is crucial to its sustainability and potential growth.

Budget 2016 infers that Job Centre Plus staff will provide support to self-employed universal credit claimants. If this does evolve any additional support should complement the specialist self-employment support given by enterprise support agencies and other professional bodies.

“Britain is blazing a trail, let the rest of the world catch up” said the Chancellor. Start-ups and small businesses are a part of this ‘blazing trail’, with Cavendish Enterprise alone helping in excess of 32,000 potential business owners under just one of its business support contracts.

George Osbourne relayed his confidence in job creation, predicting the creation of a million jobs by 2020. It’s likely that there will be a significant contribution to this total by those classed as small businesses.

It is good to see that the Chancellor has put forward a Budget for 2016 that will have a positive impact on the small business sector. There is still more that can be done to help and support this vibrant sector and we will encourage the government to do all they can to support it too.

Like many others, I will continue to review the Budget as the details emerge over the next few weeks and months to ensure that the benefits that materialise are as suggested in the Budget statement.

We all also need to ensure people feel confident enough to set up these businesses in the first place – which is where the value of the enterprise support sector comes in.”

This article was written by Dawn Whiteley, Chief Executive of the National Enterprise Network on 18th March 2016

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