This year’s budget was “fiscally neutral”, which means not very interesting. There were some good points for small businesses though.
The 2011 Budget was notable for its general lack of excitement. Not surprising given that the Chancellor didn’t have much room for manoeuvre. The Lewis Smith & Co. team have sifted through the paperwork and identified a few areas of interest.
George Osborne described the Budget as ‘unashamedly pro-growth, pro-enterprise and pro-aspiration’, and while we think that’s going a bit too far there were a few concessions to the needs of small and medium sized businesses. Here are the highlights:
- Corporation tax for small firms, currently 21%, will drop to 20% in April. This one had been announced before.
- The business rate holiday, due to end in October, is being extended by one year for businesses with a rateable value of under £6,000.
- Micro-businesses and start-ups will be exempt from new domestic regulation for 3 years from 1 April 2011 – hopefully more details to follow.
- Research and development in SMEs is being rewarded by an increase in R&D tax credits to 200% from April this year, and 225% from April 2012.
And our favourite. The approved mileage allowance payment (AMAP) payable to employees using their own car for business trips is increasing to 45p per mile (about time too).
The limit for this payment level stays at 10,000 miles after which additional miles can be reimbursed at 25p per mile, a rate that doesn’t change. The AMAP can also be paid by charities to volunteers, while employees who carry a fellow employee as a passenger on a business journey can claim an extra 5p per mile.
If you aren’t sure how the measures announced in the Budget will impact on your business then feel free to call Lewis Smith & Co. today on 01384 235549 to get some expert advice.
Lewis Smith & Co. – Accountants for clients in Wolverhampton, Walsall, Wednesbury and beyond