What does the Budget mean for Midlands Businesses

The Budget announcement today was heavily labelled as a Budget for the next generation, to provide for today and the future but without the cost all falling in the future.

For individuals this means additional funding for children’s health and sport funded off the back off a new sugar levy on sugary drinks, a greater focus on education and improving the standards in schools and maths for everybody up to the age of 18. This will hopefully provide a better equipped work force for the future.

In addition for those under 40 there will be a new Lifetime ISA that can be used to save for the deposit for their first house or for retirement and for every £4 invested the government will invest £1. This provides a more flexible way for Individuals to save for their future.

In the sharing economy two reliefs have been announced, one for ebay type selling or providing services and Airbnb rent a room, which excludes from tax income of up to £1,000.

For small businesses there are a number of good news stories changes to Business Rates Relief with properties with a rateable value of up to £12,000 excluded from rates. In addition the Stamp Duty Land Tax has been reduced for the acquisition of commercial property with a value of up to approximately £1m. However, loans to shareholders will be subject to an increased tax of 32.5% for loans advanced on or after 6 April, but existing loans will not be affected. Also the freezing of the fuel duty is welcome news for local businesses that would have had major logistics costs increases.

The Chancellor has also announced that the Corporation Tax Rate will be reduced to 17% in 2020, having already announced it will be reduced to 19% in 2017. There is also greater flexibility on the use of losses from 2017 but with some restrictions for larger businesses.

Although businesses will generally welcome these changes, even if some are deferred, they are still facing the impact of previously announced changes including the introduction of the apprenticeship levy and the increase in the national minimum wage.

For investors the main rate of Capital Gains Tax is to be reduced from 28% to 20% on 6 April 2016 although the old rate will apply to the sale of residential property, which is generally welcome, but does not help those with buy to let properties or help to free up property for first time buyers.

Overall this is a budget for businesses today, investors in the short term and for the next generation but paid for by this generation.